For the second straight year, Illinois will stop paying lottery winners starting July 1 — a direct casualty of the ongoing budget impasse, according to Comptroller Leslie Munger.
“Existing spending for schools, 911 call centers, domestic violence shelters, federally funded social and human services and higher education (also) will stop next month without new legislation,” Munger said in a statement.
In 2015, the state stopped paying people who won more than $600 during the first year of state operations with no budget. The drought lasted until Dec. 7, when Gov. Bruce Rauner signed legislation appropriating $1 billion for payouts, which resumed about a week later.
By July, however, that appropriation will end, and Illinois will have to go through the same legislative process before it can issue anything more than an IOU for $23 billion in total spending it appropriated piecemeal in 2015.
Metro-east lottery sellers are concerned the budget stalemate will cost them customers and revenue.
“If they stop paying, nobody will want to play,” said Mike Patel, owner of Max’s One Stop convenience store in Swansea.
If they stop paying, nobody will want to play.
Mike Patel, owner of Max’s One Stop, Swansea
Ann Shortsleeves, general manager of the Catholic Knights and Ladies of Illinois, a fraternal group in Swansea, echoed that concern.
“I’m sure it’s going to put a dent in sales,” Shortsleeves said.
What especially concerns Shortsleeves is what will become of her best regular customers, who have loyally bought Illinois State Lottery tickets for years, despite down years like last year, when the lottery initially suspended payments.
“I feel sorry for those people,” Shortsleeves said. “They buy these faithfully every week. Now where are they going to go?”
Short answer: to Missouri.
That’s according to William Fleischli, senior executive vice president for the Illinois Association of Convenience Stores in Springfield.
After Illinois’ decision to suspend lottery payments last year, the sale of lottery tickets fell by at least 30 percent, according to Fleischli.
“Now it’s going to be even harder to get the people back into our facilities,” he said, adding that many Illinois lottery ticket buyers in southwestern Illinois have decided to patronize Missouri, as well as buy items from the gas stations and convenience stores there that sell lottery tickets.
Now it’s going to be even harder to get the people back into our facilities.
William Fleischli, Illinois Association of Convenience Stores
Illinois’ suspension of lottery jackpots took various forms last year. First, in late August, the state cut off payouts at $25,000 and above. Then, two months later, lottery players who hit a winner worth more than $600 had to settle for an IOU. Tickets less than $600 are often cashed by retailers.
A spokesman for the Illinois Lottery could not be reached for comment.
In December, the state approved an appropriation that paid off lottery jackpot winners. But by then the damage had been done to the Illinois lottery’s reputation, according to Fleischli.
“The people who were buying didn’t understand that, or didn’t want to understand it, and they went elsewhere to buy their tickets, he said, predicting the same thing will happen this year until a new state budget is passed.
It doesn’t help that Missouri retailers already have big built-in advantages, such as lower gasoline and cigarette taxes.
“We have to provide a great service to keep our customers, which we do,” Fleischli said. “But if you give them another incentive to go across the border to buy something, that’s usually not good for us.”
In 2015, 8,000 Illinois retailers sold Powerball and Mega Million tickets — the two popular multistate lottery games.
“I hope that we get this budget resolved and the things around it that could make a budget resolved, and that we go forward as a state,” Fleischli said. “We can fix the problems that need fixing and not worry about non-payment of bills by the state, both to the lottery and the vendors of the state of Illinois.”
Suspending jackpot money comes at a time when the lottery finds itself at odds with a state audit, which found the department had violated the Illinois state finance law in order to participate in future multistate games.
The Illinois Lottery paid the Virginia State Lottery two $10 million sums one day before the state budget lapsed, which violated the part of the law that requires state agencies to appropriate money in the year that it’s used. The two payments were made in the 2015 fiscal year, but they were meant for the 2016 fiscal year.
At first, the lottery agreed with the audit’s findings, but it has reversed its decision. Meanwhile, the auditor general’s office is sticking to its conclusions.
Catherine Kelly, the spokeswoman for the governor, wrote in a statement that the prepayment was in accordance with the law. So far, the department hasn’t said whether it plans to prepay for next year, or when that could come. But the Illinois Lottery may not be able to sell tickets without doing so.
If Illinois is unable to honor lucky tickets, not all winners will have to forgo their money, however. In a continuing appropriation unaffected by the budget crisis, the state has continued to pay past lottery winners who chose to space out their payoffs from an established trust fund.
Lottery ticket sales
Here are Illinois ticket sales for both Powerball and Mega Millions by month for the past year:
- July: 5.7 million
- August: 4.9 million
- September: 6 million
- October: 4.4 million
- November: 3.8 million
- December: 5.3 million (Illinois started paying jackpots this month.)
- January: 21.8 million (The Powerball reached $1.5 billion this month.)
- February: 4.9 million
- March: 4.5 million
- April: 5.4 million
- May: 6.9 million
Source: Illinois Lottery