The NoRC report does not offer any evidence that lotteries specifically target the poor. It is unlikely that a lotteries would try to attract lower-income people through marketing, given that many lottery consumers buy their tickets outside the neighborhood where they live. Interestingly, many areas associated with low-income residents are frequented by higher-income shoppers and workers. In addition, high-income residential neighborhoods often have few gas stations and few stores, making them less likely to have lottery outlets.
NoRC survey respondents rosy views about payout and win rates
The findings of the NORC lottery survey indicate that the general public has a very rosy view of lottery payout and win rates. The vast majority of respondents thought that lotteries pay out only about 25% of sales in prize money, far less than the actual percentage. It also shows that lottery players lose more than they win, with only eight percent of respondents believing that they have ever made money playing the lottery.
Regressivity of lottery participation among lower-income people
Most lottery research has not examined the regressivity of participation among lower-income groups, but the data suggest there is a relationship between income and lotteries. In Australia, for example, lottery play is more common among lower-income households. In the UK, however, lottery participation is less common among low-income households than among higher-income households. The average number of days a household plays the lottery is significantly lower among low-income households than among higher-income people. Nevertheless, non-lottery gambling is higher among those with lower incomes.
In Illinois, for example, a study by Clotfelter and Cook examined the lottery sales of non-white households, finding that these households spent more money than non-white ones. While they received fewer lottery benefits, these households purchased more lottery products than higher-income non-white households. While these results suggest a correlation between income and lottery play, it remains unclear whether the effect is a reflection of income level or social status.
Legality of state-sponsored lotteries
The legality of state-sponsored lotteries has been a subject of debate for years. Some people regard them as harmless, while others see them as a form of addictive gambling. This misconception may stem from the fact that lottery winnings are not instant. This wait time prevents the brain’s reward centers from being activated. A lottery is not like a slot machine, where players may win big but spend only pennies on tickets.
For example, in a lottery run by the State Treasurer, the Director may contract with a private management company to manage the lotto results. But the Director must have the consent of the Director of the State Treasurer before making such a contract. In addition, the State Treasurer must keep the proceeds of the lotteries in a special trust fund administered by the Director. So, the lottery is not illegal as long as it’s run legally.
Impact of jackpot fatigue
Recent studies have shown a substantial drop in lottery revenue in states across the country. The Northeast, Mid-Atlantic and Southeastern regions have all seen decreases in lottery revenue. The South has been especially hard hit as the number of millennials playing the lottery has been disproportionately small. However, the explosive growth of casinos in some regions has weakened the lottery’s revenue. However, the numbers don’t necessarily suggest the end of the lottery as the future of this industry looks bleak.
One possible explanation for the decline in ticket sales is jackpot fatigue. Powerball, for example, experienced a similar problem last year. The $317 million jackpot in February 2015 brought in $6.4 million in New Jersey, which was four to five times less than the average jackpot. Clearly, the jackpot fatigue problem is a major concern for the lottery industry. If jackpot fatigue is a factor in declining lottery sales, it would be wise to increase prize growth.