Lottery officials from the District and six states signed an agreement here yesterday to set up a huge multistate lottery game that is expected to increase revenue to their governments and generate jackpots in the tens of millions of dollars.
The states taking part with the District -- Iowa, Kansas, Oregon, Missouri, Rhode Island and West Virginia -- will now be able to offer their players much larger jackpots than usual. The largest single jackpot in the D.C. Lottery has been $3.4 million; the multistate game, which is to begin in February, is expected to yield prizes of $10 million to $20 million or more.
And lottery officials in the District are hopeful that the new game, called Lotto America, will add $15 million a year to the city coffers, on top of the $40 million the lottery currently generates.
Although lottery officials said yesterday they were disappointed that two larger states that have expressed interest in joining -- New York and Illinois -- are not getting involved now, they said they are optimistic that those states eventually will sign up. If they do, jackpots could go as high as $80 million.
The game's organizers declined yesterday to comment about the specific rules, but it is known that it will be a "lotto" game in which players pick about six numbers out of 50 or so. If no one hits the winning number in the weekly drawings, the jackpot grows. The more players buying the $1 tickets, the greater the jackpots will be.
Organizers plan on putting a limit of about $80 million on the prize to avoid what several officials have called "grotesque" jackpots, according to knowledgeable sources. But unless Illinois and New York take part, jackpots that large are not expected.
Lottery organizers have discussed starting each drawing at $2 million. It is expected that the jackpot would double each week until someone hits the winning number.
Lotteries have been a savior for financially strapped states scrambling to find new sources of revenue. The industry does $15 billion in business annually. But many of the 27 jurisdictions that have lotteries, including the District, have seen lottery profit projections flatten lately as the games' novelty has worn off. As a result, lottery officials are continually searching for new games that have large jackpots or some unusual feature.
"This will mean more revenue for the states and the District of Columbia, and a nicer game for the players," Peter O'Connell, chairman of the newly formed Multi-State Lottery organization and executive director of Rhode Island's lottery agency, said at yesterday's signing on the steps of the District Building. "This is a very important event for lotteries and game participants."
Maryland officials said they will watch the new game with an eye to joining, but have no plans to do so.
"We're doing quite well with current strategies," said Carroll Hynson, spokesman for Maryland's lottery, which is considered one of the nation's most efficient. He called the multistate game "a chance we're not sure of."
Organizers hope the Saturday evening drawings, broadcast by satellite from Des Moines, the enterprise's headquarters, will become an addictive entertainment for millions of families.
Some lottery officials said privately that one reason to limit the jackpot is the fear that a crass, money-crazed atmosphere around the drawings could cause a backlash among lottery opponents, especially religious activists. Although more and more states have approved lotteries in recent years, the industry is aware that their operation is vulnerable to bad publicity and could be ended if the public loses confidence in them.
John Quinn, director of New York's lottery and a proponent of the multistate plan despite his state's failure to take part, said lottery operators should place a limit on the jackpots to avoid huge jackpots and to avoid unseemly "frenzy buying." It is unclear how the limit would work if it is instituted.
The nation's largest lottery jackpot was won in New York in 1985, when 21 workers at a printing press plant won $41 million after buying a block of $1 tickets.
Federal employe Pasquale Romano won the District's biggest jackpot, $3.4 million, two years ago.
In the District, which has had to reduce its revenue projections for coming years because players have become jaded about the games, officials hope Lotto America will draw more middle-class players and suburbanites. It is well known in the industry that many people with little interest in lotteries will buy tickets when jackpots become gigantic.
The D.C. Lottery, which has enjoyed among the highest per capita revenue of any lottery in the nation, has drawn a high number of its players from the city's poor and working class.
Insiders said it is hoped the new game, which will be in addition to existing lotteries in the various jurisdictions, will add $15 million a year or more to District revenue. Last year, the city's lottery agency sent the city treasury $40 million on gross ticket sales of $119 million.
But for the District and other participants, there is a danger that this new game will eat into revenue from existing games, in particular the similarly structured "lotto" games in each state.