Lottery winner won’t be only one to cash in

Higher ticket sales benefit schools; state gets 6% if Ohioan wins.

An Ohio winner in the multi-state game would pay 6 percent in taxes to the state, possibly pay taxes to a local government and lead to a $100,000 bonus for the store that sold the ticket. The boost in sales ahead of today’s 11 p.m. drawing will also add to the fund that Ohio Lottery officials said sends all of the organization’s net profits toward education in the state.

“Somebody’s going to get a nice chunk of change, depending on the area and the rate,” said Danielle Frizzi-Babb, spokesperson for the Ohio Lottery.

The anticipation for tonight’s drawing has grown since Jan. 24, when a Georgia woman won $72 million in a Mega Millions drawing. The jackpot has rolled 18 times since, shooting the total past a half-billion dollars and sending everyone from first-time lottery players to groups of coworkers to slap down $1 for a ticket.

The winner will choose between a one-time cash payout of around $269.1 million or 26 annual payments of about $14.3 million after taxes. Individual municipalities have differing laws on collections from lottery winnings and rates.

The increasing prize has boosted ticket sales, which last year totaled $2.6 billion for all games in Ohio, the ninth-biggest total in the country. On Tuesday, the day of the last drawing, $5.3 million in Mega Millions tickets were sold, and officials expect an even bigger surge today ahead of the drawing of six numbers that occurs in the studios of WSB-TV in Atlanta.

About 28 cents from each dollar spent on lottery tickets goes to the Lottery Profits Education Fund, which receives all net profits of the Ohio Lottery. Last year, the lottery payment to education was $738.8 million, and the lottery portion is annually about 5 percent of the state’s education budget.

In Springfield, the dream of hitting the lottery this week was even bigger than normal.

Anna Springer of Springfield spent her last $4 at Plum Food Mart, 1140 North Plum St., on a chance to win $500 million.

“If I win,” Springer said, “all my kids and friends and relations are getting money.”

Jane White of Springfield said she bought a Mega Millions ticket with the “dream of financial freedom.” She said she spends about $100 a month on lottery tickets and would pay bills and help family if she won.

“I’d love to win,” she said.

P.C. and Such Patel, the owners of Plum Food Mart, said this week has been “record-breaking business” for their convenience store. They expect the same today for tonight’s drawing. They said all four registers will be available to help customers with lottery purchases. They’ll also have envelopes available with pre-packaged Mega Millions tickets.

If they sell the winning ticket, they’ll receive $100,000, but said the store will also receive lots of great publicity. They said their store sold a $2 million ticket on May 3 of last year.

“We’re the luckiest place in town,” P.C. Patel said.

The state annually funnels about 6 percent of ticket revenue back to the retailers.

By the time a player has won, the Ohio Lottery already has its revenue for the education fund, which was created on the promise that the state’s lottery profits will benefit education. That contribution has topped $17 billion since the lottery’s inception in 1974, according to the lottery office. Patrick Gallaway, spokesperson for the Ohio Department of Education, said funds are moved to the schools after approval by the state legislature.

“Overall, what I would say is yes, the funding that originates from the Ohio Lottery, in general, is important for the education system in Ohio,” Gallaway wrote in an email. “But it is simply one component to the overall foundation funding that schools receive from the state.”

After the winnings are in hand, the government takes its cut, including a quarter of the entire purse by the federal government. If an Ohio resident took the one-time Mega Millions payout, more than $25 million would go to the state in taxes.

Lottery in Ohio

The Ohio Lottery Commission was founded in 1974. By 1988, the state separated lottery funds earmarked for education into the Lottery Profits Education Fund.

The state joined the growing Mega Millions game in 2002, and the first resident to take home a jackpot was South Euclid’s Rebecca Jemison, who bought a $162 million winning ticket in 2003.

Lottery has since become big business in the state. The $2.6 billion in ticket revenue during the last fiscal year was a 31.3 percent increase from the $1.98 billion in sales of 2002 and boasted the ninth straight year that proceeds surpassed $2 billion.

In a 2010 audit of the Ohio Lottery Commission totaling 194 pages, Ohio Auditor Mary Taylor wrote: “In general, auditors found OLC’s performance and management practices to be consistent with other U.S. lotteries. Overall, the lottery has performed well and generated significant revenue for the State through its game sales.”

However, that revenue could soon be compromised. In an analysis of the two-year state budget, the Ohio Legislative Service Commission wrote that transfers to the lottery’s education fund are expected to drop to $680.5 million in fiscal year 2013, a decrease of 7.9 percent from last year’s value. It cited the state’s coming casinos as the reason for the expected drop in lottery ticket sales.

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