The Connecticut Lottery will bring back vending machines to sell its instant ticket games by the end of the year, a decade after they were removed from the state following public outcry that their presence made gambling too accessible to minors.
The lottery plans to install a limited number of vending machines, mostly in chain stores, while the organization determines their effectiveness, Connecticut Lottery Corp. President and Chief Executive Officer Anne Noble told the Hartford Business Journal.
More than 200 lottery ticket vending machines peddling instant ticket scratch-off games were originally removed from Connecticut after a two-year run in 1999, when anti-gambling forces raised concerns that the machines encouraged minors to gamble. Noble said the vending machine technology has improved greatly over the past 10 years, and many now include an automatic shut-down feature that could be triggered by an employee when a minor approaches the machine.
“Today’s ITVMs [instant ticket vending machines] are different from those produced a decade ago,” Noble said. “Evidence supports that the addition of ITVMs can increase revenues for the state.”
Noble said it is too early to project how much additional revenue can be expected because the lottery has not yet determined the size of the pilot program. The organization will put out a request for proposals for the vending machines sometime this quarter.
The Michigan Lottery, which added vending machines in 2003, saw instant ticket sales rise about 15 percent among its high-volume retailers, who sell more than $2,000 per week, within one year. The Maryland Lottery, which already generated 25 percent of instant-ticket sales through vending machines, added 1,000 more in November.
The Florida Department of Lottery, after launching a 13-week vending machine pilot program last year in 10 major grocery chain stores, saw an average 36 percent bump in weekly scratch-off ticket sales at those retail locations.
States typically acquire the vending machine through a lease. Although Florida’s legislature ultimately voted down adding the vending machines last year, the lottery department estimated it would have cost the state $3.9 million annually to lease 1,000 units.
As states look to close billion-dollar budget deficits this year, lawmakers across the country are weighing options to expand legalized gambling to produce additional revenue without raising taxes. New York is considering joining the multi-state Powerball game, while Florida weighs an agreement with Indian tribes to allow full casino gambling.
GTech Corp., a Rhode Island-based gaming company that sells instant ticket vending machines, reported a 30 percent sales bump in instant tickets over the past year. Over the past few years, many of the vending machines the company has sold include bar code scanners that read a person’s age off of a driver’s license.
“Many lotteries are beginning to deploy that kind of technology to prevent underage play and are also coupling that with putting it in sight of the retailer,” said Bob Vincent, GTech vice president of corporate communications.
But Marvin Steinberg, executive director of the Connecticut Council for Problem Gambling, wonders just how effectively store operators could monitor lottery vending machines.
“You see throughout the day [the employees] are preoccupied. They’re not looking at whether or not kids are approaching the machines,” Steinberg said. “It clearly creates a risk for minors.”
Steinberg, whose organization works with the Connecticut Lottery to form gambling cessation programs, said the lottery is “undermining” those efforts by bringing back the vending machines.
“It saddens me the lottery is bringing back the machines when it was determined in 1999 they were inappropriate then,” he said. “Nothing’s changed.”
When the vending machines were removed in 1999, then-lottery president George Wandrak said the machines produced insignificant revenue and created the perception of a problem. Attitudes around the country toward the machines have been changing, though, with 30 of 42 lottery jurisdictions now offering some form of self-service machines, Noble said.
In Connecticut, the recession has taken a toll on lottery sales over the 2008-2009 fiscal year. Scratch tickets, daily games and Powerball sales are all off last year’s pace, though Classic Lotto sales are up. Transfers to the state’s General Fund — after totaling $283 million last year, the second-highest in state lottery history — were down $2 million as of mid-March.
The Connecticut lottery recorded record sales of $998.1 million in the 2007-2008 fiscal year, up $41.1 million from the previous year. As of April 20, the lottery has recorded $788.6 million in sales toward the 2008-2009 fiscal year ending June 30.
Noble said existing legislation gives her organization the power to introduce the vending machines without further legislative approval.
Sen. Andrea Stillman, D-Waterford, who played a key role in the removal of the vending machines in 1999, expressed concerns about their return to Noble last week.
“We all know that the lottery’s direction from the state has always been make more money, put more in the General Fund, and certainly now in these difficult budgetary times, there are even greater pressures for the Lottery Corp. to produce,” Stillman said. “I get really concerned that by increasing this opportunity to play, could we possibly be creating a population of more folks that are addicted?”
Meanwhile, the lawmakers have held informal discussions about adding Keno — a continuous electronic lottery game played typically at bars, bowling alleys and restaurants — as a way to help close a $8.7 billion deficit over the next two years.
