Iowa Lottery players doing more scratching, less pulling

DES MOINES - The declining popularity of pull-tab tickets is prompting the Iowa Lottery to reassess the products' future and seek a more-stable source of revenue for a state trust fund that has generated more than $16 million to help military veterans since 2008.

The Iowa Lottery Board voted Tuesday to seek legislative support next session to earmark $2.5 million of the state gambling enterprise's profits to the Iowa Veterans Trust Fund rather than channel proceeds from two instant-scratch games and two pull-tab games each year that only netted $1.8 million for the veterans' program in fiscal 2014.

Lottery spokeswoman Mary Neubauer said the intent of legislation put in place in 2008 was to dedicate between $2 million and $3 million annually from lottery proceeds to the trust fund that provides assistance to qualified veterans to help pay for expenses - such as job training, college tuition assistance (including some dental, vision and hearing assistance), and individual or family counseling programs.

Legislation approved that year authorized the Iowa Lottery to create two new instant-scratch games and two additional pull-tab games each year, with all profits from the games dedicated to the Veterans Trust Fund. However, pull-tab interest has waned as the games have matured and lottery officials no longer want to tie veterans funding to that specific product line.

'That's going to pull down our ability to help the Veterans Trust Fund and ultimately the bottom line goal for this whole project was to have a stable, ongoing source of revenue for the Veterans Trust Fund, Neubauer said.

Iowa Lottery chief Terry Rich said lottery players' tastes have changed over time and sales of pull-tab tickets have slipped while scratch ticket sales are benefiting from lower gasoline prices that appear to be freeing up more discretionary entertainment spending by gamblers playing Iowa Lottery and lotto games. People often buy scratch tickets as stocking stuffers during the holidays, he added.

'The sales of scratch tickets for the Iowa Lottery have been absolutely in the historic, record area for the last five months,” said Rich, dating back to when the new fiscal year began July 1. He said the strength of those sales has the lottery on track to hit its sales, profits, and budget targets - presuming the 'lottery gods” grow another mega-jackpot via the two headline-grabbing lotto games - Powerball and Mega-Millions.

'We're exceeding and we think sales will be really strong even in what looks like a soft economy for the state in general,” Rich said.

In the meantime, lottery officials want state lawmakers to change the code language regarding how the Veterans Trust Fund is financed and they expect to have discussions in the not-too-distant future about the pull-tab products that lack the ability to be redesigned and reinvented the way instant-scratch tickets periodically are upgraded.

Pull-tab tickets are one of the oldest games offered by a state lottery that is making plans to observe its 30th anniversary in 2015, Rich said. The lottery chief said players vote with their pocketbooks and the returns don't look promising for pull-tab products.

'If people aren't buying a product, yes, we would probably look at eliminating that product,” he said.

Neubauer told board members they likely will be asked to make a decision about the enterprise's entire product base 'in the near future,” saying 'I don't think we've reached any final decisions in that regard, but it's something that we have to take a hard look at.”