Pace-O-Matic of Kentucky Congratulates Lottery on Record Sales

Growth of both Lottery and legal skill games benefits the Commonwealth

Lexington, Kentucky, June 21, 2022 (GLOBE NEWSWIRE) -- Burning Barrel, which operates skill games powered by Pace-O-Matic, congratulated the Kentucky Lottery today on continuing to achieve record revenues for the Commonwealth. This growth took place at the same time Pace-O-Matic has expanded its reach.

"Kentucky’s lottery is generating more revenue, with increased sales of scratch-offs and I-Lottery,” said Mike Barley, spokesman for Pace-O-Matic, which has also experienced increased growth in the state. “We have been clear that our economic forecast numbers show legal games of skill have no negative impact on the Lottery. This is confirmed by the continuing growth of Lottery revenues.”

Last week, the Kentucky Lottery reported fiscal year-to-date sales (July 2021-May 2022) totaled $1.54 billion, which is $85.6 million (or 5.9%) more than the same period the prior year, and $82 million (or 5.6%) more than budgeted. Click here to read more.

Barley explained that state residents, small businesses, fraternal organizations, veterans’ groups, seniors, and charities all benefit from the Lottery and skill games doing well. Skill games could assist the state even more financially if proposed legislation passes that further regulates skill games and imposes additional taxes on the games.

“At a reasonable tax rate, skill games could provide over $100 million in recurring revenue to the Commonwealth annually while providing critical supplemental income to Kentucky small businesses and fraternal clubs, like our American Legions, VFWs, and Fraternal Order of Police groups,” said Barley. “A properly regulated and fairly taxed skill game industry will greatly support Kentucky.”

Pace-O-Matic of Kentucky, which has been operating legal games of skill across the state for nearly two years, could be assisting the Lottery. An independent economic study conducted by Dr. Peter Zaleski, an economics professor in Pennsylvania, showed that in a mature skill game market, Lottery sales may increase if those machines are coupled with skill machines in an establishment. 

Supporters of legal skill games, including Kentucky small businesses and fraternal clubs, are asking state lawmakers to pass legislation, so the games are further regulated and provide additional tax revenue for the state.

Unfortunately, the lottery led an unsuccessful effort to make legal skill games illegal in order to create a monopoly to protect their record earnings in Kentucky.  

The foundation of capitalism is competition, but the Lottery does not want to compete, said Barley, adding that it is easy to understand why. Skill games give 40% of the revenue earned to the owner of the small business where they are located. Lottery retailers earn only 6.25% of the revenue generated. Online Lottery/iLottery, cuts out retailers altogether. There is a big difference between 40% and 6.25%, and an even bigger difference between 40% and 0%, he said.

"One of the lottery’s main arguments against us is that we didn’t seek permission before coming to the market," said Barley. "However, those who live in glass houses should not throw stones."

Barley said that in 2013, when Kentucky Lottery President & CEO Mary Harville served as Lottery General Counsel, she attempted and failed to get approval from the legislature for KENO. 

After failing, Harville and the Lottery consulted the attorney general at the time and came away with an opinion that gave them the approval to allow the Lottery Board to enact KENO and iLottery. The Senate President stated that he did not believe the Lottery had the authority to take such action.

As part of ongoing efforts to ensure compliance, Pace-O-Matic employs a team of former law enforcement officers to enforce all terms of contracts and codes of conduct. These contracted terms limit the number of machines and where they are placed in a location and have protections in place to prevent anyone underage from playing the devices.

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