by John Kennedy
The News Service of Florida
With Florida Lottery sales slumping overall with the recession, the state’s new instant ticket vending machine is looking like a bet lawmakers are willing to put more money behind this spring.
The 1,000 vending machines the Lottery began installing last August — mostly in supermarkets — have sold $52 million in scratch-off tickets since they were introduced, agency officials said.
The vending machines are seen as appealing to more impulsive Lottery players — helping separate game-players from their cash even while the agency is reporting a 3 percent decline in overall sales.
“We haven’t officially decided whether we will look to expand the number of machines out there,” said Lottery Secretary Leo DiBenigno. “But we’re trying to maintain sales and the vending machines are helping us do that.”
Lottery sales were down $300 million last year, the sharpest drop in 15 years. Powerball sales were strong, drawing more than $430 million in ticket sales — although state analysts have said that about 20 percent of that money may have come from the multi-state game cannibalizing other Florida ticket sales.
DiBenigno has attributed some of the overall sales drop to a decline in the number of small, independent businesses selling Lottery tickets — with roughly 2,000 such outlets disappearing last year, in part because of the recession.
The instant ticket vending machines were popular briefly in Florida but later removed during the administration of Gov. Jeb Bush, who was seen as a reluctant supporter of the Lottery and questioned their efficiency.
But with 950 of the new machines in Publix supermarkets, Winn-Dixies, Albertsons and Sedanos in South Florida, the vending machines are pulling in more than $2,900-a-week since they were fully deployed in mid-October.
“They’re doing good,” said Sen. Dennis Jones, R-Seminole, chairman of the Regulated Industries Committee, which oversees the Lottery. “We may want to have more of them around the state. But I think the Lottery is doing pretty well, anyway. Any company that’s down only 2 or 3 percent is doing okay in this economy.”
DiBenigno told the state’s Office of Program Policy Analysis and Government Accountability (OPPAGA) last year that without the instant ticket vending machines, Florida was unable to enlist some large corporate retailers as Lottery vendors.
CVS Pharmacy and Wal-Mart were mentioned specifically as companies that steered clear of the Lottery without vending machines that make it easier for them to manage inventory and hold-down labor costs.
DiBenigno at the time hinted at eventually doubling the current number of vending machines.
“Over time, the Lottery believes 2,000 ITVMs could be placed in existing and newly established retailers,” DiBenigno told OPPAGA.
This spring could be ripe for the next phase of the expansion, he acknowledged. But the prospect also reignites some familiar concerns from Lottery critics about the state relying too heavily on gambling money.
“This isn’t a good strategy in a bad economy,” said Bill Stephens, executive director of the Christian Coalition of Florida. “The state shouldn’t prey on the least fortunate among us that might part with the last couple of bucks in their pocket for a Lottery ticket.”
GTECH Corp., a Lottery industry national giant, manufactures the machines used in Florida; while rival Scientific Games International produces the scratch-off tickets.
Brian Ballard is among a half-dozen lobbyists representing GTECH at the state Capitol; former Florida Lottery Secretary David Griffin lobbies for Scientific Games.
Although Gov. Charlie Crist did not endorse expanding the vending machines in the $69.2 billion budget recommendation he unveiled Friday, that’s not considered an obstacle to the effort.
“We’re not taking the lead in pushing the idea,” Ballard said. “But it certainly seems to make sense to kick sales up a notch.”
Compared to other states, Florida’s 1,000 vending machines are a relatively modest investment. New York state has 3,900 vending machines; Massachusetts, 1,850; and Illinois 2,750, according to the North American Association of State and Provincial Lotteries.
“States are all looking at these,” said David Gale, the association’s executive director. “It’s an emerging market. And it’s pretty self-serve.”