MITCHELL, S.D. (AP) - South Dakota's ticket lottery operation has the second highest expense ratio among 41 state-run lotteries, but a spokesman says that's mostly because the state covers a lot of area.

According to La Fleur's 2006 World Lottery Almanac, about 18 percent of South Dakota's ticket lottery revenues were eaten up by administrative and operational expenses in fiscal year 2005. Only Montana's 23 percent was higher.

Lottery spokesman Mike Mueller said the state's sparse population and large geographic area means Lottery officials have a lot of ground to cover while servicing machines and retailers.

"It's like any other retail in South Dakota, where you have to have that set infrastructure to provide that product, but you have to do it over a large land mass," Mueller said.

The states with the next highest expense ratios were North Dakota and Arizona. States with the lowest expense ratios were the smaller, more densely populated states of Massachusetts, Rhode Island, New Jersey and Maryland.

Mueller said South Dakota Lottery officials have attempted to cut costs and become more efficient. During fiscal year 2005, they extended a lotto services contract and achieved a 2.3 percent rate reduction. Additionally, a new contract for scratch ticket printing resulted in a 35 percent rate reduction.

"We're mandated by law to maximize all of the revenue from lottery sales, and we make every attempt to do that," Mueller said.

South Dakota's ticket lottery offerings include numerous instant scratch games and the lotto games Powerball, Dakota Cash, Wild Card and Hot Lotto. In fiscal year 2005, the total revenues generated by the state's scratch and lotto games were $32.75 million. The administrative and operating expenses for those games were $5.75 million.

Despite the relatively high expenses, the state still paid out 56 percent of its revenues in prizes. That ranked 31st among the 41 states with ticket lottery operations.