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Run for the border: what's illegal in Utah is good for Utah business owners.

What's Illegal in Utah is Good for Utah Business Owners

Last year thousands of Utahns spent $2.5 million to fund school districts in Idaho. Utah law prohibits lotteries and gambling activity in this state, but that hasn't deterred one northern Utah businessman from building a thriving enterprise just over the border. La Tienda, a convenience store in Franklin, Idaho, bills itself as the Home of the Utah Lottery. The store has sold three million instant lotto tickets since Idaho voters passed the lottery in 1990. And 80 percent of its customers come from Utah.

Located a-roll-of-the-dice over the Utah/Idaho border 20 miles north of Logan, Utah, La Tienda sells more lottery tickets than any of the 1,300 participating retailers in all of Idaho. Of Idaho's statewide lottery sales ($51.2 million in 1991), Utah players account for 5 percent.

Owners William and Elaine Hobbs, residents of Logan, said "Utah customers come all the way from Provo and all along the Wasatch Front" on regular outings to buy lottery tickets.

Hobbs wagers that the odds of Utah starting its own lottery aren't favorable, but that's okay with him, since his revenues have increased 20 percent with the Idaho lottery. He and his family have owned the grocery store/video shop for eight years. It had been a gas station since the 1940s and is the only mart in Franklin. The nearest town is Preston, eight miles away. "We doubled our space and our staff, and even have one room especially for people who want to scratch tickets," he said.

When asked about the theory that lotto players become obsessed, fall prey to the lure of gambling, squander pensions and paychecks, and register for welfare, Hobbs said: "In three years, I've never seen that. People allot so much money to spend for entertainment - if not for the lottery, then for shows, sporting events, or something else."

"In Idaho we have not seen that happen," responded Stephanie Hawkinson, public relations specialist, Idaho Lottery. "We watch very carefully. A majority of players are middle-income earners, not destitute people. The myth is dying. People are realizing the lottery is not the cause of such societal problems."

"Bad" Money for a Good Cause

More than one-third of the revenues from the state-run Idaho lottery are invested in the school districts to pay for new schools, building and equipment maintenance, new roofs, upgrading computer systems, library books, and so on. Thus far the schools have received $16 million. The retailer earns a 5 percent commission one each ticket sold. Tickets cost one dollar each. To date, La Tienda has earned $150,000 in commissions. It has paid out $1.5 million in prizes.

"Idaho's schools have enormous needs. They need so much money for construction and repair projects, the lottery was a way to bring a money without burdening the taxpayers," said Stephanie Hawkinson, public relations specialist, Idaho State Lottery.

Preston School District (encompasssing the town of Franklin, where La Tienda operates), for example, received $80,087 last year from the lottery, money it would not otherwise have seen.

La Tienda most recently made newspaper headlines when Marvin Davis, a Utah entrepreneur who was running a courier business to buy Idaho lottery tickets for customers, was denied a business license. Davis filed a declaratory judgement with the Utah Attorney General's office. The court ruled that a lottery courier service violated a state statute prohibiting gambling activity.
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Title Annotation:entrepreneurs William and Elaine Hobbs of Logan, Utah set up convenience store business in border town of Franklin, Idaho to cash in on sale of Idaho lottery tickets
Publication:Utah Business
Date:Apr 1, 1992
Previous Article:Win, place, or show.
Next Article:Utah banks are healthy.

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