Bharat Patel, owner of Northfield News & Tobacco, sells about 4,000 lottery tickets a week, an increase over the previous year, although still not as many as he sold before the recession.

"The lottery is always popular," he said. "Everyone knows the lottery."

Lottery sales have been good to the state and local businesses this year. Sales increased $121 million to a record $2.7 billion — about a 4.5 percent increase — for the 2012 fiscal year, which ended June 30, according to the New Jersey Lottery’s annual revenue distribution report released this week.

The increase meant an additional $20 million for a total of $950 million for the state’s budget, the fourth-largest single revenue source for the state, the report said.

New Jersey Lottery Executive Director Carole Hedinger said the main reason for the higher sales is an increase in marketing and new game promotions. The lottery more than doubled its marketing budget from $9 million to $21 million in the previous fiscal year and continued the higher marketing budget in the current year. They will try to make the marketing budget nearly 1 percent of sales, she said.

“We were way below having an adequate budget to market our product," she said. "Especially because it's a very expensive market, with new York and Philadelphia as our two main markets."

Through the first six months of the current fiscal, Hedinger said sales are 4 percent higher than the year before.

But besides funding state spending, the lottery helps small businesses like Patel’s, one of the roughly 6,500 retailers who sell tickets. They receive 5 percent of the sale plus a 1.25 percent share for payouts up to $600.

The big boost is not from the direct revenue, but from the additional traffic the lottery sales bring to their stores.

Patel’s store recently added a lottery vending machine inside that customers can use.

"It gets really busy when the jackpots are really high," he said. "They don't want to wait in line."

In Vineland, Praful Thakkar, owner of two news agency stores, said he sells about $4 million worth of tickets a year and having the tickets as an attraction helps the rest of his business.

"If we didn't have the lottery we would have a hard time," he said. "With so many taxes on cigarettes and Wawa with the gasoline, the lottery helps a lot to get people into the business."

Selling a winning ticket can also be good for publicity.

The Nesco Liquor Store in Mullica Township sold a $10,000 Powerball ticket on Jan. 23 and manager Debbie Smith said she planned to put a sign in the store advertising the winning sale.

"It absolutely helps in marketing and advertising," she said, adding they sell several hundred tickets a week.

Hedinger said studies show people who buy lottery tickets also purchase more items in the store than custoemrs who don’t buy lottery tickets. The state lottery paid more than $153 million from earned ticket commissions during the 2012 Fiscal Year — an increase of $6.68 million, she said.

Money generated from the lottery helps fund several state programs including county college capital improvement initiatives; school nutrition efforts; the Marie Katzenbach School for the Deaf; the operation of centers for the developmentally disabled, state psychiatric hospitals and homes for veterans; higher education tuition and grants; and aid to colleges and universities.

The organization says it's the state's fourth largest individual revenue producer. Since its inception in 1970, the lottery has contributed nearly $21 billion to the state.

Contact Joel Landau:

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