Gambling on hope
As college students head back to classes with a reduced HOPE scholarship, The Times takes a look at the finances of that scholarship, the state's pre-kindergarten program and the Georgia lottery that funds them.
Today: The Georgia Lottery Corp. isn't immune to budget cuts and neither are lottery players.
Coming Tuesday: For some, playing the lottery pays off. For others, the game is a drain on already small paychecks.
In fiscal year 1993, the Georgia Lottery Corp. made more than $19 million from ticket sales. Fiscal year 2011, which ended in June, brought more than $3.5 billion in ticket sales.
The money goes to prize winners, the HOPE scholarship and Georgia pre-kindergarten, ticket retailers, online ticket vendors, advertising and operating expenses.
The operations category encompasses the corporation's 285 employees and their 401(k) benefits, vehicle fleet operations, district offices and "everything it takes to run our business," said Kimberly Starks, media relation specialist for Georgia Lottery.
According to statistics from the corporation, Hall County retailers earned $4.2 million in 2010. Since 1994, they earned $41.7 million. Hall County had $594.7 million returned to it since the lottery began.
From 1993 to 2009, the lottery made $38.6 billion. Between 2009 and 2011, lottery ticket sales decreased by more than $65 million and contributions to education and other entities increased, putting the corporation in a financial pinch.
Earlier this year the Georgia legislature approved changes to HOPE and Georgia's Bright From the Start pre-K program, which alleviated some of the pain, but the lottery isn't out of the red yet.
Even Georgia Lottery Corp. employees have reduced salaries this fiscal year, Starks said, though she was unable to comment on the exact decrease.
"Since this was a recent action, it's too soon to tell, too soon to make a comment on (how reductions will affect lottery operations)," she said.
AJ Adajania, owner of Wee Willy's in Gainesville, said retailers are already noticing some effect on lottery operations locally.
"We don't see the lottery reps. They're taking a big pay cut," he said. "We've been waiting for a little machine that checks peoples' winning tickets on their own on the other side of the counter. I've been waiting two years and I still haven't gotten one. You can't even get a Georgia Lottery sign, a neon sign for the window, anymore. They don't have the money."
Some of the changes to the lottery also included decreases in the amount retailers earn from ticket sales, as passed by the legislature.
Adajania said before the lottery changes were made, retailers made 2 percent on any ticket cashed in at their store. They also made 6 percent on tickets such as Cash 3 and Cash 4 and 5 percent on scratch-off sales. Now they make no money on cashed-in tickets. Lottery officials say retailers now make 6 percent on all sales.
"We used to make money in lottery but not now since the Georgia Lottery has discontinued paying us everything. They made it a flat percentage," said Suraiya Jalali, owner of Flowery Branch Convenience on Spout Springs Road. "If someone won a Mega Millions, the lottery promises to pay $25,000 if anybody won from our store. All of this in the last two or three months was discontinued."
It may not sound like a lot, but Adajania said over the years he's lost between $150 and $200 in commission a week.
"A lot of people now, they used to keep extra money to cash if somebody won big money. Now a lot of stores will say they don't have the money," he said.
"It's a hassle for them to keep that money. If they won $500 in the past, we would keep extra money for cashing tickets but now that there's no incentive, it's like why should we carry the risk of keeping extra money?"
He thinks there are other ways the state could have saved money instead of hurting retailers.
"It's a double-edged sword," Adajania said. "They want to make a little bit more money, the state does, and they say, ‘How can we make more money?' They take it from the people who make them the money, which is not fair."