Georgians stayed away from shuttered movie theaters, restaurants and sporting arenas last month, but they kept looking to the state lottery to test their luck.
“While most other forms of entertainment were limited, April sales rebounded extremely well,” Georgia Lottery Vice President of Government Relations Brad Bohannon said during an online meeting Tuesday. “April 2020 saw a record April for the Georgia Lottery, and sales actually outpaced April of 2019 by almost 2%.”
Bohannon said during a virtual meeting of the House Higher Education Committee the brisk numbers were led by online sales, which were up 50% over the same time period last year.
It seems counterintuitive that Georgians gambled more money on the lottery during a time of layoffs and economic uncertainty. But Kennesaw State University economics professor Roger Tutterow said other inexpensive forms of entertainment that don’t require leaving the house, such as video games and streaming video services remain popular despite the drumbeat of bad economic news.
“For most consumers, hopefully, lottery purchases are discretionary expenditures that are small relative to what they earn,” he said. “(Lottery sales) were the beneficiary of where households allocated entertainment dollars, because, obviously, they weren’t going to be going out to movies or restaurants or sporting events.”
Much of the Georgia Lottery’s proceeds fund the HOPE Scholarship program, which covers a portion of students’ tuition costs at qualifying Georgia colleges, and the Zell Miller Scholarship, which provides for full tuition for some students. Last year, the lottery transferred a record $1.2 billion for the state’s HOPE and Pre-K programs.
The lottery projects it will transfer $1.13 billion to the education programs after the fiscal year ends June 30. That’s down from the $1.21 billion originally projected.
The projected revenue shortfall comes at a time when all state agencies are facing massive cuts, said Sen. Lindsey Tippins, the west Cobb Republican who chairs the Senate Higher Education Committee.
“We’re going to have less money to operate our systems on, obviously, for the HOPE Scholarship,” he said. “But we’ve got budget shortfalls across the state. I don’t think that’s a surprise to anybody with the kind of economic hit that we’ve taken. I don’t know that the higher ed’s needs are any more severe to them than they are to anybody else, any other organization in the state.”
The state is required by law to have 50% of the prior year’s net lottery proceeds saved in case of a shortfall, $572 million this year. As of February, the actual lottery reserve was nearly $1.3 billion, according to the Georgia Budget Policy Institute.
Last fall, state lawmakers spent many hours studying ways to bolster HOPE by legalizing sports betting, horse racing and casino gambling in Georgia. Tutterow said he expects those calls to intensify as HOPE and the state’s education funding priorities from earlier versions of the 2021 budget are in line for big cuts. Much of the state’s economy shut down in April and tax collections dropped by nearly 36%.
“I think it’s very likely that you will see the General Assembly continue to entertain other forms of wagering as a revenue source,” he said.
Tippins, long opposed to a gambling expansion, said he will not support any move to raise money for HOPE programs with expanded legal betting.
“I don’t believe it’s a prudent move when the economy is strong or when the economy is weak,” he said. “Until an unexpected virus came upon our society, Georgia’s economy was as robust as any economy in the United States, to my knowledge, and it did not get that way by gambling, and everyone in the United States is under the same economic pressure we’re feeling right now. Gambling is not going to bring us out of that.”