Lottery sales up as economy down

Talk about it

The state lottery posted a 9 percent increase for its budget year ending in June and, as the economy worsened in recent months, its sales have been up 10 percent.

Minnesota’s top lottery official said the reeling economy’s only effect on the program is that it might be slowing the sales boost.

“If the economy was not in the tank, I think we would be doing even better,” Director Clint Harris said.

Minnesota is among a handful of states experiencing lottery revenue increases, Harris said, though that is not the case for neighboring states.

Harris attributed Minnesota’s lottery sales increase to effective marketing and understanding what lottery players want. The economy may subtly be affecting lottery sales, he said. However, it is not clear whether frequent lottery players are spending more or whether rough economic conditions bring more people to the lottery, including scratch-off tickets and number games such as the multi-state Powerball.

A St. Cloud State University survey conducted in February for the state lottery showed that people from wealthier households play the lottery at a higher rate than do low-income Minnesotans.

But Keith Whyte, National Council on Problem Gambling executive director, said it is possible people with low incomes view the lottery and gambling in general as an investment strategy during a recession.

“If they’re feeling additional economic pressure, they perhaps are turning to the lottery even more to pay bills,” he said.

An unscientific, informal poll on the newspaper Web site, www.echopress.com, asked people if they spend more money on the lottery when times are tough. About 6 percent of the 300 people who responded selected the option, “Yes, I’m hoping for a big winner to get me out of this mess.” Another 6 percent indicated that they were “maybe” spending a little more.

Nearly 53 percent said they never buy a Lottery ticket and 36 percent said they were spending about the same amount as they always do.

Lottery sales have a widespread impact because state government programs are funded with gaming proceeds. Roughly 25 percent of lottery sales are split among the state’s general fund – which is used to pay for education, public safety and other government services – and environment and natural resources programs. That amounted to $116 million in the last state budget year.

Harris said Minnesota is among four or five states experiencing increased sales. Some nearby states are not in that category.

Unlike Minnesota’s recent 10 percent increase, Iowa lottery revenue is down 5 percent compared to the same period last year. Iowa lottery officials attributed the slip to the bad economy and to ongoing recovery efforts from flooding the state suffered earlier this year.

Lottery sales also are down in Wisconsin, where the gaming program is similar to Minnesota’s in size and scope. Wisconsin lottery spokesman Andrew Bohage said a recent 7 percent revenue drop is the result of decreased Powerball sales and because a required computer upgrade altered the release schedule for new scratch games.

If Wisconsin’s lottery sales do not rebound by January, the struggling economy could be a factor, Bohage said. He noted the program has seen some evidence that lottery players have changed their habits, such as buying fewer $20 scratch-offs and more $5 and $10 tickets.

“It would be fair to say that we’ve seen some softening” of scratch-off sales, Bohage said.

Lottery officials and gaming observers caution it is difficult to make direct comparisons between states because of various factors, including the types of games offered and regional economic differences.

Marketing is important to state gaming, and Harris said the Minnesota State Lottery does not change its advertising pitch during sour economic times. And, Harris said, the lottery has not been criticized as promoting gambling even as more people are struggling financially.

“We’re a free country and people get to have the choice to buy what they want to on their own terms,” Harris said.

Tags: lottery, sales, economy, budget, minnesota