By TOM BRECKENRIDGE
PLAIN DEALER REPORTER

Doughnut maker Vinnie Strazzo and the Ohio Lottery have a problem - competition that's taking a bite out of sales and money for education.

Customers who once stopped in Strazzo's sweet-smelling shop in Cleveland to buy coffee and a fistful of instant-lottery tickets now go next door to Lorain Ave. Instant Bingo, where they can sip coffee for free and pop open stacks of $1 tickets with more generous payouts than the lottery's "scratch-off" games.

Strazzo's commission from the lottery sales - 5 cents on the dollar - used to pay the rent at his shop at Lorain Ave. and W. 140th St. Not anymore.

"My sales have dropped by half," said Strazzo, 44.

His plight exemplifies the Ohio Lottery's declining fortunes. Sales are off 13 percent, or $143 million, halfway through the lottery's fiscal year. More important, lottery profits transferred to education are down $13 million for the period.

Most of the slump is in scratch-offs, with their sales down $95 million, or 16 percent, from last year. A big reason for the decline is instant bingo-for-charity, said lottery spokeswoman Sandy Lesko Mounts.

Dozens of charities, from peewee football leagues to holistic health centers, are raising money statewide with palm-sized instant bingo tickets and video devices that mimic slot machines. Much of the sales are occurring in taverns and parlors like Lorain Ave. Instant Bingo.

"The proliferation has directly cut into our sales of instants," Mounts said.

It's impossible to know how much of an effect instant bingo has had on lottery sales. Ohio's antiquated laws do not require charities to register their locations or report sales and profits, a practice common in other states.

Adding to the lottery’s woes is gamblers’ tepid response to Super Lotto Plus, the big-jackpot game that lottery officials reformatted last summer, and competition from casinos, riverboats in neighboring states and the multistate Powerball game.

Lottery revenues have been sliding since 1997, when the lottery transferred $749 million to education on $2.3 billion in sales. Last year, the lottery transferred $686 million on $2.15 billion in sales.

At Lorain Ave. Instant Bingo, Clevelander Tom Kelly looks as if he’s snapping peapods as he whips through a $20 stack of instant bingo tickets in search of winning combinations. Profits from this gambling parlor go to the Prisma Center, a Chester Township-based charity offering alternative forms of medicine, such as acupuncture and relaxation techniques.

Kelly, 34, said he wins more often popping open charity tickets than he does scratching the Ohio Lottery’s games. The charity tickets typically pay out 80 cents or more on the dollar, compared with the lottery’s 55 to 65 cents.

He hasn’t forsaken the lottery. He still spends $10 a day on Pick 3, Pick 4 and the instants. Kelly thinks the Ohio Lottery is good for a big win, but if you want extra cash, instant bingo is the game.

Lottery Director Dennis Kennedy said the state is using focus groups to design scratch-off games to lure new gamblers and is making more tickets available for the more popular games.

But it may be too late for Strazzo, who said he has lost 15 to 20 regulars to the instant-bingo store next door. He used to bring in $400 a week in commission on lottery sales. Now, he’s lucky to do $150.

"I just had a guy walk in and say he lost $400 next door," Strazzo said. "He used to be my high roller."

E-mail: tbreckenridge@plaind.com

Phone: 216-999-4695