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Prospect of online lottery sales worries NJ shops

Associated Press Modified: January 28, 2011 at 9:58 am •  Published: January 28, 2011

ATLANTIC CITY, N.J. (AP) — For Tushar Patel, every $1 lottery ticket he sells at his Pantry 1 Food Market in Hammonton yields more than the 5-cent commission he gets from New Jersey.

Patel said he makes more from the other purchases of customers who visit the store for lottery tickets.

"Eighty (percent) to 90 percent of the people who play the lottery here buy coffee and other things," Patel said.

The state lottery posted record sales exceeding $2.6 billion in 2010. Now, proposed legislation seeks to increase the lottery's profits by allowing gamblers to buy tickets online directly from the lottery.

Patel and other convenience store owners are worried that would eat into their businesses. They hope the proposal is a long shot of Mega Millions proportions.

The threat to the mostly small businesses that sell the tickets comes at a time when the New Jersey Lottery Commission has experienced its greatest success as more and more residents seek a big payday.

The lottery returned $924 million in profits to state programs last year, funding education, human services and veterans services, about $37 million more than the fiscal year before.

And in a state grappling with major budgetary issues, a money-making operation is a valuable commodity.

Assemblywoman Annette Quijano, D-Union, sponsored the proposal, which cleared the Assembly Regulatory Oversight and Gaming Committee in December.

The bill is still a work in progress, and Quijano said she is listening to concerns from businesses and problem-gambling organizations.

Some details of the bill itself — whether it would mean starting a new game available only online or including ones available in stores is still being discussed, she said. It would not apply to scratch-off tickets.

Quijano said she does not believe the online sales would draw customers away from convenience stores but will attract a new lottery audience.

"Whatever would help bring in additional revenues would help decrease property taxes, but I'm not going to do that on the backs of small businesses," she said.

The bill includes an amendment that says the state would redistribute 5 percent of the electronic sales among lottery agents but does not outline how to do that.

The proposal has raised eyebrows in convenience stores, where lottery machines hum throughout the day printing Pick 3, Pick 4, Jersey Cash 5, Pick 6 Lotto, Powerball and Mega Millions tickets.

One trade group is trying to estimate how much is at stake.

Connecting lottery tickets to sales of hot dogs, chips, beef jerky and coffee is nearly impossible, said Sal Risalvato, executive director of the New Jersey Gasoline, Convenience Store and Automotive Association.

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