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Lottery sets another sales record

Goher Khawaja says the best part about selling lottery tickets is that the sales are always there, “no matter what.”

Baltimore resident Bruce Bowen (left) buys a lottery ticket from Goher Khawaja, manager of Harbor Market and Deli on St. Paul Street.

Khawaja, the 23-year-old manager of Harbor Market and Deli on St. Paul Street in Baltimore, had a three-deep line of customers waiting to buy scratch-offs just after 2 p.m. Monday. The downtown convenience store is one of many that have slapped Maryland Lottery stickers on their glass entrance doors, inviting would-be gamblers to enter.

“It’s a good business,” he said. “It’s still picking up.”

Statewide, it’s been picking up for the last 15 years. Khawaja’s shop is one of some 4,200 retailers that combined to earn more than $118 million in fiscal year 2012, in which the Maryland State Lottery Agency enjoyed its 15th straight year of record ticket sales, according to figures released Monday.

Khawaja said Harbor Market and Deli consistently sells between $500 and $600 in lottery tickets each day, a fraction of the state’s record $1.795 billion in ticket sales, but enough to help keep the tiny market humming with activity.

The same is true of Sam’s Lobby Shop on East Fayette Street, where owner Samir Parikh says $700 in lottery sales happen every day.

Monday afternoon, several customers were watching a television screen populated with Keno numbers as they sat around a back-corner table covered to its edges with game sheets.

Others, some wearing stickers identifying them as members of a Baltimore jury, quickly popped in to pick numbers for the lottery’s nightly drawing. The shop sells drinks and snacks, too, but those items were of little interest to most customers.

“People love to come here,” Parikh said. “The locals come down here.”

They come every day, Parikh said, a fact that lottery Director Stephen L. Martino attributed to the agency’s penchant for listening to the requests of its customers.

“We put a premium on market research and listening to what players have to say,” Martino said. “We tweak our games accordingly.”

Martino said March’s record $656 million Mega Millions jackpot helped ticket sales, too. And, since one of the jackpot’s winners was in Maryland, the lottery received weeks of extra attention that it otherwise would not have received.

“We were able to heighten the awareness people had about the lottery,” Martino said.

Salman Iqbal, manager of the 7-Eleven convenience store on Calvert Street, said a lot of people come into his store to buy lottery tickets.

But when the jackpot gets big, “everybody does.”

Iqbal, who has managed the store since 2008, said the 7-Eleven sells about $500 in tickets daily, but that number goes way up when it’s a big jackpot.

But while small shop owners are appreciative of the foot traffic and sales the lottery brings, their take is still a relatively minuscule amount compared to the overall money pot.

And with the lottery’s popularity growing instead of waning, individual shares are decreasing.

When he opened nine years ago, Parikh — the Sam’s Lobby owner — said he had a near monopoly on the hyper local market. Now, his earnings have taken a hit.

“There’s too much competition,” he said. “I’m not that bad [off]. I just have to make sure I’m taking care of the customer.”

Of the record sales in fiscal 2012, $556 million was allocated to Maryland’s General Fund, a 7 percent increase over fiscal 2011. The money ultimately goes toward education, public safety and state-sponsored programs and services. The lottery generated the fourth-largest amount of income for the state in fiscal 2012, behind only sales, income and corporate taxes.

Irwin L. Morris, a professor at the University of Maryland, College Park, and an expert on the state lottery, said it was not surprising that the state’s top-four revenue sources would include lottery tickets.

“When you think about taking personal income taxes, corporate taxes and sales tax, those are going to be your big-ticket items in most states that have all three,” Morris said. “If not the lottery, then what would you expect to be fourth?”

But Patrick Pierce, a lottery expert at Saint Mary’s College in Notre Dame, Ind., said fiscal 2012 was still significant for Maryland, especially since sales had increased for 15 straight years.

“That’s still real money,” Pierce said. “Also, because it’s a voluntary tax, it’s politically very, very attractive. And Maryland state government, they’re going to be thrilled that they’ve had those increases in revenue generated by the lottery, particularly if they’ve kept their administrative costs low.”

The lottery calculated its fiscal 2012 expenses at 3 percent of overall sales.

Since 1973, the year it was formed, the lottery has generated $12.8 billion for the state. The lottery also oversees Maryland’s casinos, which generated $194.5 million in fiscal 2012, $94.3 million of which went to the Education Trust Fund.