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Retailers worry private manager might change terms:

December 25, 2006

For the nine years she's owned the Lightning Food Mart in New Albany, Tammy Wolford has depended on the Hoosier Lottery to attract customers.

So if Indiana leases its lottery to a private operator, it could directly affect Wolford's bottom line.

"I am not for it," she said. "I really feel if that happens, eventually it will come down to the retailers who will be losing."

Gas station and convenience store owners like Wolford fear a private lottery operator might change the terms of the games they've come to rely on.

They have many unanswered questions. For example, will the contractor concentrate on mom-and-pop outlets? Or, in a quest to maximize profit, will it negotiate deals only with convenience store chains?

The owners agree that a private operator of the Hoosier Lottery might increase total sales and boost advertising. But unless it shares the wealth, they say, they won't benefit.

Just two years ago, Wolford was so happy with the lottery she appeared in its annual report extolling its virtues.

She currently keeps 5.5 percent of the lottery sales generated at her business. Last year, the sales topped $1 million.

More important, the lottery is a powerful promotional tool for Lightning Food Mart. It brings in customers who buy cigarettes or candy along with their scratch-off tickets. And that's where a convenience store makes its money. Wolford said her profit margin on grocery items is more than 30 percent.

Any time the lottery has held a promotion at her store, she said, customers have lined up in the parking lot for the free T-shirts and chances to spin a wheel covered in tickets. Wolford fears such promotions will disappear.

Karl Ralph said his Edco gas station in Evansville once sold a winning lottery ticket worth $46 million. Now, lottery players consider the location lucky, which is great for business.

But Ralph frets that a private operator might require a larger slice of lottery sales or, worse, take away the business and give it to a bigger competitor.

"It's probably going to come out of my pocket, because you know it ain't going to come out of the state's pocket," Ralph said. "It rolls downhill, you know?"
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