Click on the image above to view a graphic representation of Virginia that displays the profits and losses for Virginia Lottery sales between fiscal years 2008 and 2009, which were broken down into the commonwealth’s 95 counties and 39 independent cities.
When Star and Larry Bell moved from Las Vegas to Danville, the couple thought their decision to open a convenience store that primarily sold lottery tickets was a sure bet.
The couple bought the Carter’s Quick Shoppe from its previous owners this past April, with the intention of making a majority of their profits off of Virginia Lottery sales. In fact, the business was built to be a “lottery store,” according to Star Bell.
“Sales have gone way down,” she said. “If we knew this was going to happen, we wouldn’t have gotten the store.”
It appears that not as many people are willing to gamble in the commonwealth during the economic downturn. The Virginia Lottery has seen sales drop from $1.38 billion in fiscal year 2008 to $1.36 billion in fiscal year 2009, which represents a $22.6 million decrease.
Paula Otto, executive director of the Virginia Lottery, said the loss in sales could be the result of a combination of factors, such as a spike in gas prices during 2007 and 2008, loss of jobs in the commonwealth, the way interest is now accrued on lottery money and the fact that North Carolina launched their own lottery in the spring of 2006.
“In the past, the lottery has proven to be recession proof, but this time is not proving to be the case,” Otto said. “People who haven’t had a change in their economic status, such as losing a job, have changed their habits and aren’t buying as much.”
But, Otto admits that the North Carolina lottery has had a major impact on the commonwealth’s lotto sales, and that North Carolina residents accounted for about 10 percent of all lottery profits in the commonwealth. Now, that number has dropped to about half.
“If you look at the Virginia and North Carolina border, it’s huge,” she said. “Many people who live along the border drive into Virginia, because it’s closer for shopping, and then they buy their lottery tickets.”
Of the 10 counties and three independent cities that are located on the border between North Carolina and Virginia, every single one saw a drop in sales between fiscal years 2008 and 2009.
Although the southern counties have seen a major decrease in sales, Otto said that the lottery money is distributed evenly throughout the state for public education, with $439.1 million being distributed to schools during 2009.
Connie Harrell, who has owned the Stateline in Skippers for the past 10 years, literally has the state line running through her store, which enables her to sell both Virginia and North Carolina lottery tickets. She is one of the Virginia Lottery’s top sellers-in 2009, her store ranked twelfth in the state out of 6,246 vendors, with lottery sales totaling $1.9 million.
But, Harrell even lost money last year, experiencing a $328,103 drop in sales between fiscal years 2008 and 2009.
“The economy has just as much to do with the effect of my decline in sales as North Carolina getting their own lottery does,” she said.
Retailers along the border depend on the lottery, Harrell explained.
“It’s basically what we do here,” she said. “We’re all about the numbers.”
Harrell said her store is primarily designed to sell lottery tickets, but with the dip in sales, she has started to think of other ways to turn a profit. The Bells are also focused on boosting sales inside their store, by getting more items such as soda and chips to sell.
“We’re trying to build up as much snack and food items as we can, but that is hard during the recession, because people have cut back on those items too,” said Bell.
Otto said convenience stores account for about 80 percent of the Virginia Lottery’s total sales, but with the increase in gas prices, many people are not leaving the pump to go inside to buy snacks or lottery tickets. The lottery “really saw sales dip in convenience stores,” she said.
“Convenience store owners love the lottery, because it’s a way for consumers to get away from the gas pump and get into the store and buy soda or chips,” Otto said. “When gas got up to $4 per gallon, that had a huge impact on sales in convenient stores. That makes sense-people don’t want to go into the store and buy tickets when they have paid so much money to fill up their tank.”
When the North Carolina lottery began, it didn’t start selling all of the same jackpot prizes that the Virginia Lottery sells, such as Mega Millions or Powerball. But now they are slowing catching up, Otto said, and sometimes there is a “jackpot duel” with Powerball prizes.
“It does get competitive,” she said.
But, the Virginia Lottery hasn’t give up hope. The lottery released new games in 2007 to compete with the North Carolina lottery, such as new scratch-off tickets, and staff members have brainstormed ways to expand into new markets. In the past three weeks, the Virginia Lottery, as a pilot program, is now selling tickets in dollar stores throughout the state.
“We tried to as quickly as we can to get ourselves in places we know consumers are going in this environment,” Otto said.
In addition, Otto said that grocery sales have gone up, because many people are conserving money and eating meals at home. The Virginia Lottery has taken this into account and the organization has boosted advertising in grocery stores.
“Grocery stores are one place where sales have gone up,” she said. “We decided if we had signs displayed more consistently throughout the stores, consumers may be more willing to engage in the lottery. We have seen growth.”
Adam Fallah, a customer service associate with the northern Virginia food chain Wegman’s, has seen a $350,786 increase in sales during his two years employed at the Woodbridge store.
“It’s been surprising to see an increase in sales,” he said. “We have regulars that come in all the time. There has been more advertising in the area, on billboards and on the radio.”
For the time being, both Harrell and Bell will continue to sell lottery tickets, and hope that their food items will help them turn a profit. But, with North Carolina about to introduce Mega Millions into their line-up of games, Bell is worried about her store’s future.
“Honestly, all we’re doing is trying to make the bills, and after January with Mega Millions, I don’t know what will happen.”
How I Obtained the Information:
Staff members from the Virginia Lottery supplied me with numerous spreadsheets of information, that helped me deduce the total sales lost throughout the state between fiscal years 2007, 2008, 2009, as well as the top vendors in the state, and those that lost the most money. The spreadsheets they sent me included:
- Total sales from each vendor in the state for fiscal years 2007-2009. These spreadsheets listed a total of 6,246 vendors, with the names of each store and their address. Having this information was so helpful, because after analyzing the information in both Excel and Access, I found that many vendors in the south had lost sales, which I was assuming was mostly due to the creation of the North Carolina lottery. Then, I was able to locate the names of specific vendors in the areas that were the most affected and I found the phone numbers to the stores on the Internet. All of the stores I called said the North Carolina lottery had affected them severely.
- The Virginia Lottery also provided me with spreadsheets for 2007-2009, which listed each county and independent city in Virginia (which totals 134) and their total lottery sales. After analyzing the data, I could determine which areas of the state decreased the most in sales, and there were many areas down south.
- The lottery also provided me with the top 100 retailers in the state for 2007-2009. Although some of the retailers made millions during these years, I did see a decrease in sales for some of these stores.