TOPEKA, Kan. – Kansas lottery and gaming revenues, of which the state’s share rose 5 percent to $103.8 million in 2011, likely will go through some major changes in the next 12 months, the new Kansas Lottery Commission executive director said Wednesday.
Lottery Commission executives currently project that the state’s share of gambling revenues a year from now will be in the same ballpark as now, but that the sources of the funds will change significantly, newly appointed executive director Dennis Wilson told Lottery commissioners at their July meeting.
New revenues from the state’s Hollywood casino in Kansas City, expected to open in February, and the new Kansas Star casino opening soon after that near Mulvane are projected to replace a one-time $25 million payment that Kansas Star developers made in 2011 to bid for a state casino license.
“The job of this commission and the lottery will be changing when all those casinos come on line,” Wilson said.
Meantime, traditional lottery ticket sales, which generate about two-thirds of the gambling proceeds Kansas receives from Lottery operations slumped slightly in 2011 and remain plateaued below their pre-recession peak in 2007.
Even with a 1.3 percent decline in total lottery ticket sales to $232.4 million during 2011, lottery officials were able to increase the state’s share of that money to $70 million, up $1 million from a year earlier, primarily because of cost cutting and new efficiencies achieved during the year, Wilson said.
Reviving those sales, perhaps by eliminating some lottery games that seem to be drawing from the same groups of players, will be one of the Lottery’s greater priorities in the year ahead, he said.
Lottery sales of instant scratch tickets and some of the state’s own games increased during 2011, but sales figures show that many of the big multi-state games, Powerball, Mega Millions and Hot Lotto suggest that some of those simply pulled buyers away from each other.
“One of the questions we are going to be asking is why do we have as many games as we do,” Wilson said. “Are we cannibalizing ourselves?”
Slumping lottery sales are a problem in many of the 43 states that offer lotteries, according to researchers who’ve been crunching some related tax revenue numbers for 2009 collected by the U.S. Census.
Lottery revenues, once touted as painless alternatives to tax increases, continue to trail tax increases in many states, according to one report by the Rockefeller Institute in New York. New Hampshire, which offered the nation’s first state lottery in 1964, has experienced an approximately $40 million drop in lottery revenue over four years, that report calculates.
Kansas’ lottery ranks 34th among the nation’s 43 lottery states in terms of relief it provides taxpayers, the Tax Foundation, a non-partisan Washington D.C. think tank found in February.
Based on 2009 numbers, which were the latest researchers had to work with, Kansas’ lottery provided the equivalent of $21 in tax revenue per capita; just less than $23 per person in Oklahoma but slightly more than $20 in Iowa. Lotteries are more lucrative for taxpayers in Missouri, which brings in the equivalent of $41 per person and less so in Nebraska, where the number is $16.
Lotteries provide the most taxpayer relief in Delaware, where the Foundation calculated the games provide the equivalent of $357 per person in tax revenues.
Kansas lottery income streams will change, says new director