U.S. LOTTERIES DECLINING
2 January 2009
Ticket sales drop as gamblers check spending
A weakening U.S. economy and declining discretionary
incomes are negatively impacting one source of
government financing that had previously been widely
regarded as recession-proof: lotteries, reports the Wall
Street Journal this week.
Lottery sales fell 2 percent in the third quarter
year-on-year, reducing the dispersal of revenues to
education and other programs.
Across the U.S., many state lotteries are reporting
hefty declines, the WSJ reveals, with ticket sales down
nearly 10 percent in California and more than 4 percent
in Texas over the past few months. In good years, these
lotteries have turned over more than $1 billion apiece
to education programs, the most common lottery
beneficiaries.
Lottery officials have long praised their games as
low-cost entertainment that grow even more appealing to
players when the economy turns down. But lottery sales
nationwide fell about $215 million, or nearly 2 percent,
from July through September compared with the same
stretch in 2007, according to La Fleur's magazine, which
tracks the lottery business.
The decline in lottery sales "is an unusual phenomenon,"
John W. Kindt, a gambling critic and business professor
at the University of Illinois, told the Journal. A big
proportion of lottery tickets are bought by people with
gambling problems who are likely to play more in bad
economic times, he said, even as intermittent players
cut back.
Lottery-ticket sales, which include the big multistate
jackpot games such as Mega Millions as well as the
instant games known as scratchers, have dipped only once
since 1992. That was in fiscal 1998, when they edged
down less than 1 percent in a recessionary climate,
according to the Census Bureau.
Otherwise, revenue has marched steadily upward. In the
most recent fiscal year, which for most states ended
June 30, national lottery sales rose more than $1
billion to $52.7 billion, La Fleur's reported.
In past recessions, players continued to buy tickets,
but not this time, said Jack Boehm, director of the
Colorado Lottery. "Now they are thinking, 'My retirement
is gone, I might lose my job, I'd better start putting
money away' - that means fewer dollars for lottery
tickets."
In Colorado, sales since July have dropped almost $5
million, or 2.3 percent, compared with the same period
last year. The decline has hit even the usually
resilient scratch-off games, Boehm said, and at the
current pace the state's lottery will sell 5 percent
fewer tickets this fiscal year than last year -- a $25
million drop-off.
Lottery officials cite other reasons for weak sales,
including a lack of big jackpots in multistate games and
increased competition from other lotteries and casinos
for gamblers' dollars. Natural disasters hurt sales in
the Midwest and along the Gulf Coast, while Hurricane
Ike knocked out thousands of retailers in Houston, where
a quarter of Texas Lottery tickets are sold, said Robert
E. Heith, spokesman for the Texas Lottery Commission.
At focus groups held for the commission earlier this
year, about half the players said the poor economy had
prompted them to cut back on lottery purchases. Die-hard
players -- those who bought tickets in the previous
month -- reported small cutbacks. But 27 percent of
less-frequent players, those who bought tickets some
time in the past year, reported declines of 81 percent
to 100 percent in their lottery purchases, Heith said.
In some states, lottery officials are warning benefit
programs that they will be receiving less money.
Massachusetts, which uses much of its lottery funds to
aid cities and towns, expects net proceeds to drop to
$863 million from $913 million last fiscal year. In
Bridgewater, 25 miles south of Boston, that aid accounts
for about 10 percent of town revenue, and a cut this
year would probably require closing a library or a
centre for senior citizens, said Paul Sullivan, the
municipal administrator.
Some lotteries are counting on Christmas
stocking-stuffer tickets to boost sales. Others are
dreaming up new games to spur interest among buyers. And
lottery officials across the U.S. are hoping for a big
new jackpot for Powerball, which is tweaking its rules
and adding a major new participant, Florida.
Terri LaFleur, publisher of LaFleur's magazine, said she
expects "a lot of legislative scrutiny for the expansion
of lottery games, such as video lottery terminals, in
2009, as states face severe budget crunches."
Online Casino News Courtesy of
Infopowa
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