TRENTON – The future of the Lottery is at stake. At least, the sales and marketing aspect of it.
An August request for proposal from the Treasury Department to potential contractors interested in taking over the sales and marketing operations of the state Lottery has many retailers worried their ticket sales will plummet.
To hear their concerns, among others, the Assembly Budget Committee will hold a hearing on the issue Wednesday. No bills will be voted on.
Much of the fear is derived from the proposal’s stipulation that would create an online mechanism to purchase Lottery tickets.
At least two groups – the Asian American Retailers Association (AARA) and the Communications Workers of America (CWA) – have been critical of the plan.
AARA said the proposal would put the brick-and-mortar convenience stores and gas stations at a disadvantage, since it would cut into their revenue stream.
Besides ticket sales, they fear losses in revenue from consumers not buying such secondary products as newspapers and beverages that they commonly buy in addition to the game tickets.
“If we have decreased revenues, that’s going to lead them (retailers) to lay off people,” said Satish Poondi, AARA’s government policy director.
AARA estimates that the average local store will lose one-third of its lottery revenue in the first year alone, along with all of the secondary sales of items like newspapers or coffee.
New Jersey Lottery public relations manager Judith Drucker said increasing the overall revenue is one of the goals of the RFP.
“We are looking toward the future,” she said. “We want to tap into contract management expertise to meet the growing needs of the public.”
Lottery revenues have been growing. The fiscal year 2012 revenue for the Lottery was $950 million, higher than the $930 million from FY2011. The money is used to fund various education, veterans, and disabled residents’ programs.
She disputes the idea that contracting out the sales and marketing aspect of the Lottery would put small businesses at a disadvantage, saying Lottery tickets already are sold by both big and small retailers.
“We’re already in large-scale stores and supermarkets,” she said. “We want to tap into the contract management expertise to meet the growing needs of the public.”
Drucker added the agency needs the help of all 6,500 retailers that sell game tickets for the operation to remain successful.
She added that various facets of the New Jersey Lottery – product development, game ticket printing, the web site, social media, advertising and technology – are contracted out. But, Drucker emphasized that the “Lottery will continue to maintain authority and control.”
The Assembly Budget Committee hearing will begin at 10 a.m.