Published: June 6, 2022

Missouri lawmakers gut lottery's ad budget even as they enable unregulated competitors

Missouri’s state lottery has become a crucial fiscal asset for the state, projected to generate $400 million in revenue for Missouri schools this year. That windfall could be even greater if the Legislature hadn’t spent the past few years drastically slashing the lottery’s advertising and promotional budgets to practically nothing.

It would actually be comforting to believe this is just short-sightedness by the state’s leaders, but it’s fair to wonder if it’s a deliberate undermining of the games. After all, these are the same lawmakers who take political contributions from an unregulated (and arguably illegal) video gaming industry that competes with the lottery for gaming dollars.

The issue was raised anew last week with the sudden resignation announcement of longtime lottery Director May Scheve-Reardon. She cited frustration at advertising cuts that, she said, are already starting to affect ticket sales.

Scheve-Reardon has presided over roughly a doubling of lottery sales in her 13 years at the helm — a record that wouldn’t have been possible without an advertising budget that, in years past, went as high as $16 million. But recent years of slash-and-burn cuts by the Legislature brought it down to its current level of $400,000. A separate line item for promotional events has been cut in the new state budget from a little over $2 million to … $1.

“We spent 13 years building an amazing business, and slowly but surely, the Legislature was taking away the tools we needed,” Scheve-Reardon told us last week.

Most sizable businesses spend from 5% to 10% of their gross revenue on advertising. The Missouri lottery has never spent anything like that — but at least its multimillion-dollar ad and promotional budgets allowed it to compete with the casinos and other gambling options. The $400,000 available now is little more than a token. “You can’t do anything with that,” Scheve-Reardon said.

Is that perhaps the whole point?

It seems inconsistent that legislative Republicans, who are always waxing on about how government should be run like a business, would scuttle one of the first rules of business — you have to spend money to make money — and hobble a cash cow that schools rely upon. It makes even less sense that these cuts in an already-modest lottery promotional budget come at a time when state coffers are flush with cash.

As we reiterated recently, the Legislature has failed to rein in the thousands of unregulated electronic gaming machines operating around the state, in apparent defiance of state gaming laws, which contribute not one red cent to Missouri schools or other services. The makers of those machines do, however, contribute heavily to the lawmakers who keep letting them operate — and who are, at the same time, making it harder for the lottery to compete with them. What are the betting odds that’s a coincidence?

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