Accepting credit or debit cards to purchase lottery tickets and down-sizing prizes were two of the main propositions of some Tennessee legislators so that more money could be generated and directed to support education. State lottery

Both of these propositions were met with critics at a meeting last week of the Senate Lottery Stabilization Task Force. A leader of a conservative group aired his concern about the ethical issue of enticing more people to lose more money on the lottery by making it available to be purchased via credit or debit card. And a lottery official expressed that from his point of view a cut in prizes could actually be a bad business decision. Meanwhile a leader of a conservative group aired his concern about the ethical issue of enticing more people to lose more money on the lottery. Lotteries

According to Tennessee Education Lottery Corporation, 26.5 percent of net lottery proceeds generated last year went toward scholarships which means $281.8 million was directed towards scholarships and $11.6 million to after-school programs. Prize payouts represented a 58.6 percent which is translated into $695.1 million went into prize payouts to lottery game winners. Another 6.5 percent went to the vendors who sell the tickets and the rest to other operational expenses.

Some task force members are in favor of reducing the prizes because it can leave more money available for scholarships. Claude Pressnell, president of the Tennessee Independent Colleges and Universities Association Even said that a small adjustment in the money paid in prizes would translate into millions of dollars made available for scholarships.

However Andy Davis, chief financial and information systems officer for the lottery, thinks that history has proved that this might not be a good idea to generate more money. Kentucky did this in 2008 resulting in actually a downfall in sales and revenue and in the end education was affected as there was a gap of $2 million compared to before the adjustment.

“We are selling a winning experience,” said Davis. “If the players are not having a winning experience, they will, over a period of time, stop playing.”

However, Sen. Randy McNally, R-Oak Ridge said he doubted that the typical lottery ticket purchaser would actually worry about the percentage prize payout when stopping by a convenience store “for a six pack of beer and a carton of cigarettes.”

Present law requires that all lottery tickets be purchased with cash. Several legislators have proposed the idea of at least changing that law to permit the use of debit cards as a way of increasing ticket sales and increasing revenue. Davis stated that 33 of the 44 states with a lottery now allow debit card purchases and 12 also allow credit card use. And explained that the “Y generation,” ages 18-35, is more oriented toward debit cards than other age groups, and legalization of debit cards could enhance “impulse buying” by people pertaining this group. Thus, marketing would be more focused and directed to younger people.

The president of the Tennessee Eagle Forum, Bobbie Patray said that although the “pressure for revenue is relentless,” legislators should actually stop at the possibility of approving laws that will entice people to gambling (especially the poor who are already in debt) in the false hope of making money. This raised the the opposing opinion that actually poor people do not use debit cards and that it is actual cash in an account.