Lottery Marketing and Low-Income Consumers


The NGISC report does not provide evidence that lotteries target low-income individuals, but this would be an inappropriate marketing strategy for any company. Lottery consumers often buy their tickets outside of the neighborhoods in which they live. Higher-income shoppers and workers regularly pass through many of the same areas as low-income residents. There are fewer lottery outlets in high-income neighborhoods. That’s why the NGISC’s findings have no significant bearing on lottery policy.

NoRC survey respondents had rosy views about payouts

Not all respondents to the NoRC survey were positive about lottery payouts. While most believed that fewer than 25% of total lottery sales were given away as prizes, the actual figure is closer to 50%. The vast majority of players lose more money playing the lottery than they win. Among lottery players, only 8% said they had actually made money from their lottery plays. However, they do not have rosy views of lottery advertising.

Regressivity of lottery participation among lower-income people

Recent research has shown a significant relationship between the number of lottery tickets purchased by low-income individuals and lottery play. However, the effect of sociodemographic factors is less clear. White, non-Hispanic, and older people tend to be the least likely to play the lottery, while their number of days is the lowest. Interestingly, non-lottery gambling was found to be disproportionately higher among lower-income individuals.

Origins of lotteries

The origins of lotteries are not well-known, but the practice of drawing lots to determine who owned a piece of land dates back to ancient times. The Bible commands Moses to divide land by lot. Romans used lotteries to award slaves and property. Later, they became popular in Europe. In 1612, King James I (1566-1625) conducted the first public lottery for the town of Jamestown in Virginia. Since then, lotteries have become an official source of government funding, and today, the United States lottery has been around for centuries. However, there is a more ancient origin of lotteries, which is the source of its popularity today.

Problems facing the industry

The lottery industry is faced with several challenges. One of the most difficult is jackpot fatigue, a condition in which players grow impatient with smaller prizes in exchange for larger ones. As a result, ticket sales decline and prize growth is stunted. According to a JP Morgan report, ticket sales in Maryland dropped by 40 percent in September 2014. Another challenge is that players are increasingly turning to multistate lotteries, which offer bigger jackpots and spread the risks across many jurisdictions.