Lottery expansion faces hurdles despite state money woes

CHEYENNE (AP) — As the state loses millions of dollars in revenue from its declining minerals extraction industry, the new Wyoming Lottery has started paying off by distributing some of its profits to cash-strapped cities and towns.

A member of the board that oversees the Wyoming Lottery says the state might want to look at an expansion to tap even more revenue. But that would require expanding the type of games allowed — a prospect that faces long odds in a Legislature wary of encouraging compulsive gambling.

WyoLotto started selling tickets in 2014 after the Legislature authorized its creation. Under the law, the lottery must share the first $6 million of its profits with municipalities. Anything above that will go to K-12 public schools.

Earlier this year, the lottery handed over its first proceeds — $1 million — to the state. WyoLotto estimates that it will be turning over about $3 million a year to the state from the sale of Powerball, Mega Millions, the state Cowboy Draw and the new Lucky for Life draw games, Lottery CEO Jon Clontz said.

But the lottery is limited to draw games, so new offerings likely are not on horizon, meaning Wyoming won’t get much more than $3 million a year.

A study by WyoLotto staff last year estimated that adding more lucrative instant-win scratch ticket games would boost total lottery proceeds to the state to about $12 million a year, Clontz said.

“So you can see how much we’re leaving on the table by not having scratch products,” he said.

Wyoming derives most of its tax revenue from the mineral extraction industry. However, low coal prices, growing wind and natural gas competition, and new federal regulations have taken a toll on the industry.

Jim Whalen, a member of the Wyoming Lottery Commission, says the state might want to consider an expansion to tap revenue potential.

“When I look at our state, and I think OK, so we are in a situation clearly that we’re suffering a little bit in terms of our revenue,” Whalen said. “While the lottery was never intended, I don’t think, to essentially augment the revenues for the state of Wyoming in order to pay bills, frankly, this could be one of those unintended benefits of creating a lottery.”

Rep. Dave Zwonitzer, who was the main sponsor of the legislation in 2013 that created the Lottery, said he hasn’t heard of any expansion proposals.

“But it would not surprise me if a bill to that effect shows up,” said Zwonitzer, R-Cheyenne. “I know several communities would be very much in favor of it, but I know a lot of the state would not be in favor of it.”

Another supporter of the 2013 lottery bill, Sen. Michael Von Flatern, R-Gillette, said he wouldn’t vote for an expansion because the legislation passed on the promise that instant-win games like scratch tickets would be prohibited.

Sen. Leland Christensen, who opposed creating the lottery, said he would be open to looking at any new proposals. But the Republican from Alta said he would need more information about the amount of money people spend on the lottery and how much is returned to the state.