A marketing campaign highlighting the state’s new spending of lottery proceeds has not exactly sent tickets flying off the shelves, auditors say.
Ticket sales increased 4 percent last year – to more than $510 million, a bit shy of their 2008 peak. But the increase is due to changes in jackpots and economic conditions, says a draft report from the Joint Legislative Audit and Review Committee.
Legislative auditors give no credit to lawmakers’ decision in 2010 to spend the biggest chunk of lottery proceeds on college scholarships and grants, followed by preschool programs for the poor.
Previously, that money was spent on school construction. State Sen. Jim Kastama spearheaded the shift to higher education, saying it would help sell more tickets.
“However, it does not appear that the change in beneficiary was responsible for this increase,” auditors said of the $19 million increase in sales.
Kastama, a Puyallup Democrat, didn’t dispute that higher sales haven’t materialized, but blamed the lottery’s marketing.
The lottery spent $2.3 million last year, a little more than a quarter of its direct advertising budget, to get the word out about the new benefits for college students and preschoolers. Otherwise, much of the advertising focused on the prizes and the benefits of winning them.
Kastama, who patterned the funding scheme after Georgia’s, said Washington should also emulate that state with an advertising campaign “built around education, not get-rich-quick schemes.”
“The takeaway isn’t that the program doesn’t work. The takeaway is that we haven’t done it correctly,” Kastama said in a statement.
Auditors said they could find no statistical connection between advertising and increased sales.
The state spent $12.1 million last year on an advertising contract with Cole & Weber United, and auditors said they didn’t see results – except in one case involving the introduction of Powerball, in which they said the sales increase was actually less than what was spent on ads.
Lottery spokesman Arlen Harris said advertising is “a big question mark for anybody in sales,” not just the lottery.
“Coming up in six weeks we have the Super Bowl. And Pepsi and Coke and Budweiser and Doritos are all going to be spending millions and millions of dollars on advertising. They don’t know that the purchase of those ads drive sales of their products or not,” he said.
The lottery says it was limited in how it could advertise its former mission to fund school construction because school districts worried that voters would get the wrong message: that districts flush with lottery cash didn’t really need those local levies.
It’s helpful to be able to advertise the new mission to fund college education, Harris said. And if it’s not paying off yet, he said, that might be because word of the year-and-a-half-old change just needs more time to circulate.
Just 6 percent of lottery players surveyed last year were able to name higher education as the new beneficiary of the lottery; a third of those said that funding might affect their decisions to buy tickets.
Jordan Schrader: 360-786-1826 jordan.schrader@thenews tribune.com
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