Md. Seeking More Lottery Players

As competition intensifies among the Maryland, Virginia and D.C. lotteries, Maryland is conducting its largest overhaul ever, with special efforts to attract more Washington suburban players.

Maryland lottery officials are changing six of their seven games, expanding their advertising budget by 16 percent, buying more ads on Washington area radio and cable television stations, launching partnerships with private businesses and allowing more lottery players to win small cash prizes in hopes of luring new or lapsed players.

The Maryland lottery director, Buddy Roogow, said that his agency continues to gross about $1 billion annually but that several of the games have shown disturbingly flat yields in recent years. Profits grew by nearly $2 million last fiscal year -- thanks largely to a more frugal contract with a new computer vendor -- but gross sales fell by $70 million. That's the first annual drop in eight years.

"We're under great pressure," said Roogow, appointed nearly a year ago by Gov. Parris N. Glendening (D). "I think the lottery stagnated for too long. . . . Maryland's problem became dramatic last spring and summer and fall."

Noting that the lottery traditionally has more players and visibility in the Baltimore area, Roogow said he is increasing efforts to attract people who live or work in the Washington suburbs. That's where the Virginia Lottery's trademark "Lady Luck" is heavily advertised on TV and where D.C. lottery outlets flourish just inside the District line. The Maryland lottery can't afford the ad rates of Washington's major TV stations and newspaper, Roogow said, so it will devote more money to radio and cable TV.

"We're already doing much cable in the Washington suburbs," he said. The Maryland lottery recently contracted with cable's NewsChannel 8 to show nightly numbers drawings in Maryland and the District, he said. Until recently, those drawings were televised only on a Baltimore station.

Maryland's move comes as the region's three government-run lotteries are scrambling to find new players and maintain sales. The lottery is Maryland government's third-largest revenue source, after income taxes and sales taxes. Lotteries play a somewhat smaller role in Virginia's and the District's revenue schemes. In all three jurisdictions, lottery revenue is used to finance a variety of basic government services.

The D.C. lottery recently announced that profits fell by $6 million in the last fiscal year, largely because of reduced advertising and tougher competition from Virginia and Maryland. Meanwhile, Virginia has launched lottery tie-ins with popular games such as Monopoly and Battleship in hopes of averting sales drops that were predicted in January.

Maryland's shake-up is more dramatic. Roogow said he is steering the lottery in new directions in hopes of attracting more players, partly by emphasizing entertainment over get-rich-quick possibilities.

"I believe very strongly the lottery has to present itself differently to the public," Roogow said. "There's been a slow decline in players throughout the state over the past few years. I want to reverse that over time."

Maryland soon will announce several "cooperative agreements" with private-sector companies such as vacation providers, pizza restaurants, car dealers and service stations, Roogow said. In exchange for free publicity by the lottery, the companies will give away cars, trips, pizza discounts and other goods to lottery players. Details will vary, Roogow said, but lottery tickets will continue to be sold only by registered agents, who are forbidden to sell to people under 18.

Other state lotteries have made similar efforts, Roogow said, "but I think we in Maryland are [going to be more] aggressive." Meanwhile, he has changed, or soon plans to change, six of the Maryland lottery's seven games:

* Lotto. "We've got to change Lotto dramatically," Roogow said, because it has suffered the steepest drop in recent months. By mid-November he plans to have a revamped game that will allow players to win small prizes -- perhaps $2 to $5 -- by picking three of the six jackpot numbers drawn twice a week. Currently, players must pick at least four of the six numbers to win any prize, with all six required to hit the jackpot. Players choose their numbers from a field of 49.

By doling out more small prizes, Roogow said, "we'll increase the number of winners dramatically, so more people will have a winning experience." Studies show that failure to win is the main reason people quit playing lotteries.

* Instant Scratch-Offs. Scratch-off cards traditionally return about 50 to 55 percent of their sales in prizes, Roogow said. He has begun increasing the "payout" in several games. One recent game, Big Silver, paid 64 percent of its gross in prizes.

"It costs us more money to do that," Roogow said. "Obviously we're hopeful the changes will result in higher volume." He said the lottery hasn't made a big fuss about the higher payouts because many players assume it's greater than 64 percent to begin with.

* Pick 3 and Pick 4. Sales have slumped in these nightly numbers games, which are the lottery's biggest earners. In 1998, Roogow plans to add "second-chance drawings" for players who save losing tickets.

Prizes for the second drawings might be cars, vacations or other items offered through the cooperative agreements.

* Bonus Match 5. "Bonus Match 5 is, in my view, our least successful numbers game," Roogow said. He's thinking of replacing it with a new cash game that would allow jackpots to exceed $50,000. That's the current limit on the game, which has five drawings a week.

* Keno. "Keno seems to be performing steadily and well," Roogow said of the bingo-like game that flashes winning numbers on a video screen every five minutes. The only planned changes, he said, involve "more promotions, such as a `Keno doubler.' " That would involve a costlier bet that can double a prize.

* The Big Game. The multi-state jackpot game, which Maryland joined in August 1996, is not scheduled for any changes other than a stronger advertising campaign. All Big Game proceeds go to the Maryland Stadium Authority -- as do proceeds of some scratch-off games -- as opposed to the state's General Fund.