Who Wins the Lottery?
In 1967, the New York lottery introduced its first lotto drawing, raising $53.6 million in its first year. The novelty of the lottery attracted residents of neighboring states to buy tickets and eventually twelve other states set up lotteries by the end of the decade. The lottery proved an effective means to fund public projects without increasing taxes. It was also able to draw the interest of Catholic populations who, for the most part, were tolerant of gambling activities.
Per capita lottery spending is highest in counties with larger percentages of African-Americans
The numbers of lottery players are not as clear as you might think. One study from the Vinson Institute found that lottery players with low incomes spend more money on tickets. They spend $597 per year more than people with higher incomes. In addition, lottery players from lower-income neighborhoods spend five times more money than people with higher incomes. Additionally, African-Americans spend more than non-African-Americans on tickets. The authors of the study cite research that shows that counties with large nonwhite populations spend more money on lottery tickets.
While lottery winners may not always be wealthy, many studies show that lottery spending benefits African-Americans and poorer residents. In Georgia, for example, the lottery program helps African-American students attend college, so that means that lottery players benefit from this. Another study from Saint Leo University shows that white lottery winners receive more HOPE college scholarships than African-Americans. This is one example of lottery spending being beneficial to low-income black communities.
Lottery players with lower incomes spend more on tickets
Studies have shown that households with lower incomes spend more money on tickets. On average, households spend $289 per year on tickets, compared with $162 for higher income households. Among the lowest income households, this amount increases to $597, which equates to about 6% of a household’s income. In some states, lottery players spend even more than that. But these players are not all in it for the money.
Although lottery tickets may temporarily fuel a dream of financial freedom, they add up to $412 a year. That’s a big chunk of money, considering that one quarter of American households do not have an emergency fund. A recent study from South Carolina found that lottery players with low incomes spend more than twice as much as those with higher incomes on tickets. However, states have the right to decide who can and cannot sell tickets to lottery players.
Lottery spending is inversely related to education level
One study shows that lottery playing is inversely related to education level, revealing that people with lower levels of education are more likely to play. This is supported by the fact that lottery spending is higher in African-American counties, where people have lower education levels. The study also shows that lottery spending is higher among African-American respondents than in any other racial group. People with low education levels spend more on lottery tickets, as are those who are single and low-income.
The majority of the literature on lottery play focuses on the relationship between education level and lottery spending. It’s no surprise that lottery playing is more prevalent in lower-income neighborhoods and among minorities. Using census data, Lang and Omori (2009) found a correlation between poverty levels and lottery play. They found that poverty levels were a predictor of lottery spending, as was neighborhood disadvantage. In addition, a higher education level and lower lottery playing were significantly associated with poverty levels.