As lawmakers work under the gun to find funds to close the state’s budget gap, unclaimed lottery prizes have been repeatedly tossed out as a possible solution. To be sure, $27.6 million can sound pretty tempting, but here’s something even more alluring: Law already directs plans for this money, and it’s raking in $19.6 million in revenue for the state — every year.
Simply put, unclaimed prize funds belong to lottery players. The law provides that unclaimed prizes be used for future scratch-off prizes or promotions. As you can imagine, our players love this! By strategically funneling these funds back into prizes, the Louisiana Lottery has increased scratch-off sales over 40 percent the last five years. In a nutshell, more sales equals more money for the state. That’s because 35 percent of lottery revenue is dedicated for K-12 public education, per Louisiana’s voter-approved constitution.
Conversely, removing the lottery’s ability to use unclaimed prize funds to supplement scratch-off prizes would cause sales — and the state revenue it produces — to plummet, according to a recent performance audit report conducted by the legislative auditor. The audit projected the resulting net annual loss in state revenue to be $16 million or a whopping $80 million over five years.
Guided by current statutes, the Louisiana Lottery has built a solid business model that maximizes state revenue and places it among the most efficient lotteries in the country. It causes me concern that in the rush to patch a gap, we would unintentionally create a chasm.
Rose J. Hudson
president/CEO, Louisiana Lottery Corporation