Despite Big Pot, Schools Losing a Lot on Lottery

California’s national record-breaking Lotto pool has pulled the games of chance out of a prolonged sales slump, but the portion that goes to schools will be no panacea for the state’s money-short education system.

Even with players buying chances at the rate of millions of dollars per hour up to the Wednesday cutoff time, lottery officials said the 34% of the take that goes to schools will be less this fiscal year than last.

“Before last week we were at 95% of where we should be to achieve our goal for the year. Last week we moved to 98%. Now I would say we’re going to achieve our sales goal, but our goal this year is still less than last year,” said Joanne McNabb, communications manager for the California Lottery.

Since the current jackpot of $117.1 million began its climb in mid-March, McNabb said ticket sales have reached $254.5 million. Would-be winners shelled out more than $50 million of that amount in the last few hours leading up to the Wednesday drawing, setting a new high for a single day’s business, she said.

Last-minute Lotto hopefuls packed convenience stores and mom-and-pop markets in Orange County just before the 7:57 p.m. drawing. By 7:15 p.m., Lotto players clearly outnumbered the hot dog and Slurpee buyers at the 7-Eleven store on Harbor Boulevard in Santa Ana.

Even as the clock ticked on, customers frantically scribbled down their numbers.

“I can’t talk right now,” one customer scolded her friend. “I can’t get the right vibes for my numbers.” Sohk Yoon, owner of Family Market Liquor in Santa Ana, said he had seen record business at his store Wednesday, selling more than 5,000 tickets, 1,000 of those to one person.

“I don’t want to come in second,” announced customer Tony Gonzales, a 23-year-old Rancho Santiago student and football player. “I want to win it all. But it all depends on what you do with it. Man, you can’t spend that much money in your lifetime. “

Customer Carol Durbin, placing a $20 bet, said: “I just hope whoever wins puts it to good use. There’s an awful lot of homeless out there. That’s probably what I’d do: help the homeless.”

Shortly before 8 p.m. Saeid Tari, 26, and Alexis Horvat, 22, watched intently as the winning Lotto numbers appeared on the television screen above them at the El Torito Grill in Costa Mesa. Between them, the two had spent about $300, and they shuffled through tickets looking for a winner. When none were, he dialed his cellular telephone to see if his relatives had won.

“It would be good if nobody won,” Tari said, so he could have another chance at the huge prize.

The previous U.S. jackpot record--$115.58 million--was awarded in Pennsylvania’s lottery in 1989.

Wednesday’s winning numbers were 1, 7, 16, 19, 26 and 53. The bonus number was 52.

The jackpot sales prompted officials to predict that revenues for the fiscal year ending June 30 would be $2.15 billion, the goal they had set several months ago. That would produce $762 million for schools, compared to the $980 million they received last year.

With student enrollment higher and lottery sales lower, officials said the education system will receive $123 per student in 1991, compared to $163 last year.

Until the latest super jackpot began fueling gambling fever in the state, McNabb said, interest in the games of chance, particularly the big money-maker Lotto, seemed to be flat. In a report to his board, lottery director Chon Gutierrez attributed the slow action in part to the country’s economic woes and to a flagging interest nationwide in lottery games.

“I think most of the lotteries across the country are seeing less performance than they anticipated,” McNabb said. “There’s sort of a maturation of the whole industry and some new things will have to happen if it’s going to continue to grow.”

In California, sales began to drop last summer with a revision in the Lotto game that created some player dissatisfaction. Players complained that the change, which was made to create more big jackpots, dramatically lessened their chances of winning.

Although sales remained level after that, lottery officials decided that their original sales goal for the year of $2.4 billion was too optimistic and reduced it to $2.15 billion.

In December, McNabb said, sales plunged even lower as Lotto failed in nine consecutive draws to produce a major jackpot. In January, sales rose as a jackpot began to build, ultimately reaching $40 million. They then dropped back about the time the United States became involved in the Gulf War.

Gutierrez told his board that in a climate of uncertainty created by a chaotic event like a war, people tend to hold on to their discretionary dollars, causing sales for entertainment such as the lottery, Disneyland and the movies to go soft.

By March the lottery’s sales were so soft that Gutierrez said without a dramatic turnaround revenue for the year would be just $2 billion and the schools’ cut of the take would be under $700 million. He said the agency also would have to prepare to cut back once again on its overhead with another reduction in advertising.

Five days after he made his predictions, the turnaround began with the current jackpot buildup.

At a board meeting today, Gutierrez will report that sales for the year are doing well for the lottery’s other games, including Scratcher at $365 million, or about 96% of the lottery’s goal; Topper at $128 million, or about 109% of its goal, and Decco at $79 million, exactly at the goal.

Little Lotto, a game introduced five weeks ago that has a fixed jackpot of $500,000, has so far produced $39 million in sales, well above initial predictions.

In the long run, McNabb said, officials believe there will have to be other changes in their operation. To continue attracting new customers, she said, the agency is planning on expanding its distribution system, hoping to move more heavily into supermarkets and possibly even major retail outlets.

“California’s different from the East Coast in the way people shop,” she said. “They shop one-stop and we’re testing ways to get more games into these places where they go.”