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School Services of California, Inc.
Community College Update
October 1, 1996
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As Expected, New Lottery Games Keep $100 per ADA/FTE
Estimate for 1996-97 on Track

With the first quarter of the current fiscal year almost complete, the California State Lottery appears to have weathered a series of legal blows with less damage than many had feared.

In response to both a court decision and an Attorney General's opinion in June, the Lottery had to scrap its Keno game and shut down its scratcher vending machings (see " First Keno, Now Vending Machines Scratched by Lottery" on page 143 of the July 5, 1996 Update.) As much as $600 million in play revenue was attributable to Keno and the vending machines.

According to current Lottery figures, transference from Keno and vending machines to other existing games, the development of new games and new distribution methods suggest that Lottery revenues &emdash; which would have fallen to $90 per ADA/FTES in 1996-97 if all $600 million was lost entirely &emdash; will not drop below $100 per ADA/FTES for 1996-97. (This matches SSC's earlier projection of $100 per ADA/FTES &emdash; which assumed that at least one-third of the lost sales would be recouped &emdash; and which was as much as $8 higher than other projections.)

On September 26, the Lottery unveiled its Hot Spots game, a pari-mutual Keno spin-off. By December, in time for the Christmas season, the Lottery expects to have scratcher game automation in place, which should stimulate play by increasing the number of terminals and providing for cross-redemption. And while the legal eagles have been taking their swipes at the Lottery, the Lotto gods have been smiling, creating a series of rollovers this summer to build mammoth pots and stimulate play.

&emdash; Bob Blattner
[Posted 10/1/96]