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Virginia Lottery Hits Its Own Jackpot

May 3, 2013

By Shelby Mertens
Capital News Service

RICHMOND – Lottery winners aren’t the only ones with any luck: The Virginia Lottery saw record ticket sales in the past year, as the economy continued its recovery and several big-name retailers started selling tickets.

During the 2012 fiscal year, which ended June 30, the Virginia Lottery’s ticket sales totaled $1.6 billion. That was an increase of $136 million, or 9 percent, from 2011.

The lottery’s profits – after paying prizes, retailer compensation and administrative expenses – topped $487 million last year. That easily beat the previous record of $455 million in 2008. All of the profits go to public education.

Virginia Lottery players also had their share of luck, with more winners and more games offered. In 2012, players collected more than $962 million in prizes, an increase of $81 million from the previous year. Thirty-three Virginia Lottery players won prizes of at least $1 million in 2012.

Todd Ogden, a Richmond resident, has been playing the Virginia Lottery for 15 years. Although Ogden hasn’t won millions of dollars, he believes that if you keep trying, you’ll eventually win something.

“My theory is, if you don’t play, you don’t win. Your odds of winning are just as good as the next person,” he said.

mega_millions

Ogden said he buys lottery tickets twice a week and usually plays high-dollar games such as Mega Millions, Powerball, Win for Life and Decades of Dollars.

He used to follow a strategy of playing the same numbers every time because he believed they would eventually be winners. Ogden acknowledged that he usually buys more tickets when the prize money skyrockets.

As it turns out, many others do the same. Paula Otto, the executive director of the Virginia Lottery, said ticket sales usually jump when the stakes get high.

The unprecedented $656 Mega Millions jackpot in March 2012 was a prime example. According to the Virginia Lottery, more than 28,000 Mega Millions tickets were sold every minute across the state on March 30 and profits totaled $21.8 million throughout the jackpot run. On the night of March 30, five tickets each won $250,000.

Brian McCarthy of McLean was Virginia’s biggest prize winner of the year, netting a Mega Millions jackpot worth $107 million. Two people won the Decades of Dollars game, which means they will collect $250,000 a year for 30 years.

Otto cited other reasons why ticket sales have increased. They include more retailers, the economic recovery, Virginia’s population growth and the growing variety of games.

When you increase retailers, you increase sales, Otto said.

“We’ve been working very hard the last few years to increase our retailer base,” she said. “We lost a lot of retailers in the down economy, but if you look over the last few years we’re probably up about 500 retailers. And considering how many we’ve lost, that’s pretty significant.”

At the end of 2012, nearly 5,300 retailers were selling lottery tickets across the state – up 4 percent from the previous year.

The Virginia Lottery recently added Wawa, which has more than 60 convenience stores across the state, to its list of retailers. The Rite Aid pharmacy chain also has been added in the past two years.

The Virginia Lottery has 70 representatives from across the state to recruit retailers to sell lottery tickets.

Top retailers tend to be from Northern Virginia, the Richmond area and Hampton Roads, the most populous regions in the state. For example, the No. 1 outlet, selling $3.7 million in tickets last year, was the K-1 Dairy Store in Arlington. The runner-up, at $2.7 million, was the Handy Dandy Market in Woodbridge, also in Northern Virginia.

Nicole Tolf, manager of Handy Dandy, sees a trend in the lottery’s popularity. “I notice when the jackpot is big, everybody comes out – even people who haven’t played in years.”

But Tolf attributes the rise in lottery ticket sales chiefly to economic factors: “Honestly, I think it’s the economy. People are looking for a chance to get ahead.”

Retailers earned almost $91 million in commissions from the Virginia Lottery. They receive a 5 percent commission for every ticket sold. Retailers also enjoy incentives and bonuses for selling tickets that win prizes of at least $20,000.

In more than a dozen towns, lottery sales more than doubled from 2011 to 2012. Sales soared from about $10,400 to nearly $118,600 in the unincorporated community of Long Island, in Campbell County in southwest Virginia.

Among the state’s larger cities, sales jumped 17 percent in Fredericksburg, 12 percent in Arlington, 11 percent in Alexandria and Chesapeake, and 10 percent in Virginia Beach and Portsmouth. Richmond was up 6 percent.

Otto said the Virginia Lottery expects sales this year to be about the same as last year. She said 2012 will be hard to top because of the multiple jackpot winners and because it was a leap year, with an extra day of sales.

One day may not seem like it would make much of a difference, but Otto said the Virginia Lottery sells about $3 million in tickets, and earns $1.3 million in profits, each day.

Like the people who buy the tickets, the Virginia Lottery is banking on some luck as it looks to the future.

“One of the challenging parts of forecasting your profits is that there is a good bit of luck sprinkled in there,” Otto said.

Top 25 Virginia Lottery Retailers

Here is a map of the 25 outlets that sold the most Virginia Lottery tickets in fiscal year 2012. The green icons stand for the top five; the yellow icons for the slots six through 10; and the red icons for the remaining top 25 stores.

The map is based on this data: