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Wyoming Lottery officials: proceeds from new lottery will likely never meet original estimates

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CASPER, Wyoming — Proceeds from the new lottery will likely never meet the estimates projected by advocates in 2013 when the games of chance were legalized, lottery officials say.

State law requires the first $6 million of lottery proceeds to be distributed to cities, towns and counties. Proceeds beyond that will go to an education fund.

But during a recent quarterly Wyoming Lottery board meeting, WyoLotto Chief Operations Officer Louise Plata said it is unlikely revenues will ever reach $6 million under its current form.

That means local governments could receive less than initially hoped for, and the education fund could get nothing, the Casper Star-Tribune reported (http://bit.ly/1IhWWmn ). They haven't received any money since tickets went on sale in August 2014 because lottery officials are still paying off a loan for startup costs.

The state Legislature did not use any public money to start the lottery.

Plata and lottery CEO Jon Clontz said there are a number of reasons larger lottery proceeds could not materialize.

They include the state's small population; the few games that can be offered — only draw games are allowed; the prohibition against offering scratch tickets; the costs to launch a new game; and the proliferation of historic horse racing machines throughout the state.

While the lottery officials did not have any projections of proceeds after the bank loan is repaid, they said allowing scratch tickets would boost revenues.

Some lottery supporters assert the lottery was never meant to generate much money for education and local governments. But argue the promises of revenue are what they thought made the measure ultimately pass the Legislature.

Lottery officials have said money will be transferred after a bank loan is repaid, and that costs to buy equipment and market new games would cut into the ability to distribute proceeds in the first years. In late March, some lawmakers began publicly expressing disappointment that local governments hadn't seen a dime, at a time while the lottery had added a third game.

As the bill that authorized the lottery was debated in the Senate in early February 2013, revenue estimates varied.

The Legislative Service Office, the Legislature's nonpartisan staff, estimated the lottery could bring in an extra $30 million to the general fund a year, a figure based on estimates from North Dakota, where scratch tickets and other games are legal. The National Conference of State Legislatures estimated revenues would range from $5 million to $9 million.

But lottery supporters recently said it was never intended to fill a revenue gap.

"We have to remember that the lottery was really formed to keep the dollars in the state of Wyoming," said Brian Scott Gamroth, a lottery board member. "It wasn't a revenue stream. The revenue streams for the state of Wyoming are energy-related."

Rep. Dave Zwonitzer, R-Cheyenne, said he sponsored the bill in 2013 to give Wyoming residents a new form of entertainment and to help Wyoming retailers make some money. Many people purchase food or drinks when they buy a ticket. Those purchases were going to nearby states before the Wyoming Lottery, he said.

But other lawmakers said they remember supporters highlighting the promise of money for local governments.

"The testimony that was in the House at the time was how they were going to make this money," said Rep. Tom Reeder, R-Casper, who opposed it. "I truly believe the reason that passed was because people thought we were going to get this money to cities, towns and counties. There was skepticism then. Now it seems like it's coming out as the truth."

Lottery law co-sponsor Sen. Michael Von Flatern, R-Gillette, said the lottery is still a young enterprise and it may hit $6 million in future years.

Meanwhile, Wyoming's local governments have resigned themselves to not expect money any time soon, if ever, from the lottery.

"We initially got kind of excited about it and thought we'd see revenue," said Pete Obermueller, of the Wyoming County Commissioners Association. "We were quickly abused of that."


Information from: Casper (Wyo.) Star-Tribune, http://www.trib.com

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