While it’s possible to make the argument that there are worse ways to waste your money than playing the lottery, there’s no denying that money spent on lottery tickets is almost always wasted. So why, at a time when the financial woes of the middle class are readily apparent, is it that at least two dozen states are selling lottery tickets in record numbers?
In Minnesota, $520 million worth of lottery tickets were sold during the 2012 fiscal year, which ended June 30. That’s an all-time high, up $15.6 million from the previous high, recorded the year before. In fact, lottery ticket sales have hit new highs for five years in a row in the state.
It’s not just Minnesota. Virginia just reported record profits from lottery sales. So did Kentucky and Iowa. All told, according to Minnesota Lottery officials cited by the Minneapolis Star-Tribune, at least two dozen states are posting record lottery sales lately.
Why is playing the lottery—the quickest way to empty your pockets and have nothing to show for it—more popular than ever?
The economy certainly is playing a role. Lottery tickets always seem to sell well in a bad economy. This is ass-backwards, of course: People waste the most when they should be saving the most. But that’s the way it is.
Lottery officials sure don’t seem to be bothered by the idea that business is booming on the backs of people experiencing hard times. In a Louisville Courier-Journal article, Arch Gleason, Kentucky Lottery president and CEO, curiously said that, despite an unemployment rate of 9% in the state, consumers somehow have more disposable income nowadays. That is, at least they have enough disposable income they’re willing to part with in a desperate chance to hit it big. “The economic conditions are definitely benefitting us,” Gleason said.
Lottery officials in Iowa seemed quite giddy that a range of factors boosted lottery sales to all-time highs. “The stars definitely aligned for the lottery during the past 12 months,” Iowa Lottery CEO Terry Rich said via statement, according to the Cedar Rapids Gazette. “We knew this year would be good, but, ‘Wow.’”
The mania over last March’s epic Mega Millions drawing obviously helped boost sales in these and other states. Over the years, lottery executives and marketers have also developed a range of games meant to attract the most players and raise the most money. Their job is to siphon as much cash from consumers as possible, and apparently they’re doing it quite well lately.
Scratch games have been particularly lucrative in Minnesota, according to the Star-Tribune:
“The lottery has been innovating,” [University of St. Thomas business professor John] Spry said. “On the one hand you have $650 million jackpots. On the other hand, you can play a scratch game where you can win a $100,000. Different players like different profiles of risk. And the lottery has sort of over time learned what appeals to the different players.”