Iowa Lottery expects to buck downward gaming trend

DES MOINES – Iowa's lottery chief said Tuesday he believes his enterprise can buck national downward trends for gambling with stable profits this year and a slight increase in fiscal 2011.

Lottery CEO Terry Rich also told Iowa Lottery Board members that federal legislation could pass soon that would legalize Internet gambling – a potential change that would require Iowa's governor and state lawmakers to take action to maintain regulatory and taxing control to “protect our borders.”

In another development, Rich said lottery terminals on Oct. 19 will alert players when their ticket is a winner by sounding a message he taped saying “you're a winner” followed by the lottery's familiar “woo hoo” celebratory hoot used in the agency's advertising campaigns. The new winners' alert would serve both marketing and security purposes, he said.

Lottery officials provided budget details at the board's monthly meeting indicating the Lottery produced $60.55 million in proceeds for the state in fiscal 2009 with $243.8 million in sales and they expect they will exceed this year's projected $60.33 million in profits based on $246 million in sales.

Rich said those numbers came against a backdrop of economic downturn and hard times for some gambling operations nationwide. For fiscal year 2011, which begins next July 1, the board approved a proposed budget that projects $250.6 million in sales and transfer proceeds to the state treasury topping $60.9 million.

“I think it's a good stretch goal. Philosophically, I would never budget a decrease,” he said. “Our trends are good.”

Iowa's lottery chief cited a report on gambling-generated state revenues issued by the Nelson A. Rockefeller Institute of Government that ranked Iowa's lottery as having the third-best growth rate behind North Carolina and North Dakota. But he noted “some other lotteries are looking at some pretty scary times.”

Rich said there is renewed interest among some states to implement a national lottery game that might build on the successes of Powerball and Mega-millions games. If that happened, he said, Iowa likely would be interested in participating in a national lotto game.

Also, Rich told the lottery board that gambling publications believe a House bill that has 58 co-sponsors to allow Internet gambling has a good chance of becoming federal law. He said it appears states would be given a 90-day window to opt in or out – noting his recommendation would be for Iowa elected policymakers to keep hold of regulatory and taxing functions to avoid being subject to federal controls.

Before adjourning, the board voted to name Mike Klappholz of Cedar Rapids to succeed Mary Junge, also of Cedar Rapids, as board chairman and Tom Rial of Des Moines as vice chairman. Rich also announced that Barbara DeHeck, board secretary since the lottery's inception 24  years ago, planned to retire Oct. 31.

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