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Howard Stutz

Casinos, Lottery Scratch Together Alliance

6 July 2005

A Las Vegas-based lottery and casino game designer has developed a scratch-off game that lets the two competing gambling disciplines serve the same customer.

While the game, LottoSino, is working in New Mexico under a four-month contract, its developer believes the idea could work in Nevada, which is one of only nine states without a state lottery.

The $3 scratch-off ticket, developed by Vegas Games, offers lottery customers 11 different ways to win money with a top prize of $30,000. Another portion of the ticket has scratch-off field for the Santa Ana Star with prizes ranging from logo merchandise, meals in the casino's restaurants and cash awards of up to $5,000.

In New Mexico, "LottoSino," was launched in early June as a joint venture between the New Mexico Lottery and the Santa Ana Star Casino near Albuquerque.

"This game has been successful and has been able to show that lotteries, casinos and racinos (race tracks with casino areas) can coexist in one state," said Gary Baldwin, president of Vegas Games. "We're talking with other states about this concept and we believe it will have appeal in different markets."

Legislative attempts to remove Nevada's constitutional ban on lotteries have been killed 24 times since 1975, mostly at the request of casino-backed lobbyists. A lottery proposal died during the recently-completed legislative session.

But Baldwin, a former financial investigations agent with the Nevada Gaming Control Board, said a lottery in Nevada would work as long as the casinos are involved.

"The Santa Ana Star saw this lottery game as a way to bring customers into the casino," Baldwin said.

In New Mexico, the state lottery competes for customers with 12 American Indian casinos and five racinos. More than 800 outlets, such as convenience stores and similar businesses, sell lottery tickets.

LottoSino, one of more than a dozen different scratch-and-win lottery games offered by New Mexico, sold more than $230,000 in tickets during the first two weeks after its launch. Lance Ross, a spokesman for the lottery, said LottoSino was an average seller compared with similar scratch and win games.

Conrad Granito, general manger of the Santa Ana Star, said the casino doesn't share in any proceeds from the sale of lottery tickets, but those who win on the casino portion must redeem their prizes at the casino.

"We've given away the $5,000 cash prize twice already," Granito said. "We saw this game as a way to market to another audience and drive customers into our facility. We think this is a good arrangement for both the lottery and the casino."

However, the relationship will be short-lived. Shortly after its rollout, an anti-gambling advocate complained about the joint venture and Gov. Bill Richardson asked the lottery to halt the program. Lottery officials said the game will be discontinued after the four-month contract expires.

That news hasn't deterred Baldwin, who is still seeking casino-lottery partnerships in other states.

"We've shown this can work in New Mexico and other states have expressed some interest in the idea," Baldwin said.

Casino leaders and lottery supporters debate whether the lottery-casino concept could work in Nevada.

"It still doesn't answer the question of do you want the state competing with your largest business?" Station Casinos spokeswoman Lesley Pittman said. "There are still numerous public policy questions about a lottery that need to be answered."

Assembly Majority Leader Barbara Buckley, D-Las Vegas, said that Nevada casino operators, doing business in other states, have learned to co-exist with state lotteries.

"I think the concept has some merit," Buckley said. "The lottery is something we'll continue toward as a way of helping the state."