Lottery Sales Regressivity

The National Association of State and Provincial Lotteries (NASPL) reported the sales figures for each state and the District of Columbia, as well as Puerto Rico. While the total amount of sales in each state fell, those in the District of Columbia and Puerto Rico grew. While nine states experienced declines in 2003, sales in West Virginia, Florida, Missouri, and Puerto Rico increased. In all, the sales of lottery tickets in the U.S. increased by more than 20%.

Regressivity of lottery participation among lower-income people

A common criticism of government-sponsored lotteries is that they disproportionately capture revenues from lower-income consumers. Previous academic research suggests that lottery participation is regressive, proportional, or progressive, depending on the measure used. But it is not clear whether this regressivity is constant over time. In the current study, we examine longitudinal lottery sales data across six lottery states in the United States to identify patterns of lottery regressivity.

Origins in Europe

The first European lotteries began as far back as the 15th century. In the Dutch city of Bruges, the widow of the Flemish painter Jan van Eyck promoted a lottery, aiming to locate winners of his lavish works of art. The lottery’s prize was often more bodily than financial. The first English lottery, for example, gave out silverware and tapestries to lottery winners.

Marketing strategies used by lotteries

Aside from creating and delivering winning lottery promotions, state lotteries are also ramping up their marketing efforts to attract new players. Besides traditional marketing efforts, state lotteries are increasingly using content marketing, social media activations, and online purchasing options. In addition, they are distributing transparency reports and making public service announcements to promote Lottery. The goal of all these strategies is to reach a wide audience and entice players to purchase a ticket.

Revenue generated by lotteries in the U.S.

While critics of lottery revenue say it can replace existing state funding for education, statistics show that revenues from lotteries are increasing. In fact, in 2010 the state of Georgia spent $294 million on education, while North Carolina spent $287 million. Lottery revenue is not as transparent as normal taxes. Consumers often have no idea how much they are paying in taxes when purchasing a ticket. And while the question of whether or not the money should be used to improve education rarely comes up, many people see it as a way to spend extra money.