ANNAPOLIS – State officials are concerned about declining lottery sales, but they are confident the sales slump will not affect the state’s ability to meet its obligation for the new football stadium in Baltimore.
Both Buddy Roogow, director of the Maryland State Lottery Agency, and John Moag, chairman of the Maryland Stadium Authority, predicted the state will raise the $32 million required for the stadium this fiscal year, which ends June 30, 1997.
“Overall, it’s not good and a problem,” Moag said of the drop in lottery sales, “but it doesn’t have an impact on us.”
Moag added that the flexibility the lottery agency has in creating games to raise money for the stadium assures him the debt will be met.
For fiscal year 1996, the Department of Fiscal Services projected $20.8 million in lottery sales for stadium financing. Department analysts said the actual amount was $20,748,000.
The state budget calls for $32 million in lottery proceeds to finance the stadium each year for the next three fiscal years. In the fourth year, the amount needed drops to $22 million, and it tapers off after that until 2023, when the stadium will be paid off.
Budget analyst Mary Bewig, who helped develop the stadium financing plan, said the state arrived at $32 million because of the performance of instant games in 1988, when the Maryland Stadium Authority was formed to plan Oriole Park at Camden Yards.
At that time, sales of separate instant lottery games generated revenues of roughly $8 million each per year. Initially, the state used only two instant games to pay for Camden Yards, Bewig said.
By statute, the state is authorized to utilize up to four instant games to pay for the stadiums, thus allowing for the $32 million projection.
Lottery revenue dedicated to the football stadium comes from two sources – instant games with sports themes and the Big Game, Maryland’s new multi-state drawing aimed at competing with Powerball. Both are suffering from stunted sales.
Budget analysts at the Department of Fiscal Services report that from July 1 to Oct. 27, all instant game sales have generated $47.5 million, a decline of $14.9 million – or 24 percent – when compared to the same period last year.
When the Big Game was announced in June, fiscal services estimated sales would be between $39 million and $54 million per year, depending on how much it cannibalized other games, especially Lotto.
Since Big Game’s introduction eight weeks ago, its sales have reached $5.7 million. Were sales to continue at that rate, they would be $37 million in Big Game’s first year.
But Roogow said the slow pace of sales is no cause for alarm, either for taxpayers or legislators.
“These games are generating an amount very close to what was projected, so there is no problem as far as the stadium is concerned,” Roogow said.
Roogow attributed the decline in instant games sales to a lack of advertising during the summer, when the state changed lottery contractors. He acknowledged the sales drop was steep but predicted improved sales with more promotion.
On Halloween, Roogow’s agency introduced two new games to boost sales for the games causing his department the most concern.
One is a new instant game with a $2 million top prize and additional prizes, including 100 new four-wheel-drive vehicles. The other gives seven free tickets for the Pick 3 evening game to players who purchase six midday tickets for the same game. The Pick 3 promotion runs through Nov. 24.
For this fiscal year, spending of the stadiums’ $32 million – which is augmented by a $1 million contribution from Baltimore City -breaks down as follows:
* $1.8 million for debt service on the land
* $11.8 million to pay baseball stadium bonds
* $4.3 million for bonds sold for the football stadium.
* $15 million for various other stadium expenditures.
Although Roogow, Moag and budget analysts do not think the lottery agency will have any trouble raising the necessary funds, there are alternatives available.
One year ago, the state attorney general’s office issued an opinion saying the lottery agency could “conduct any type of lottery it deems appropriate in support of the Stadium Authority, so long as the lottery has a sports motif or is otherwise clearly sports-related.”
However, no one in Roogow’s organization expects things to get that bad. Lottery agency spokesman Carroll Hynson said, “One way or the other, we’re going to have to hit it [the $32 million total], and we will hit it.” -30-