While there is no definitive evidence that lotteries intentionally target low-income residents, the report does point to some patterns. For example, Massachusetts has the highest percentage return to any state government from a lottery, while New York has the largest cumulative sales. These findings highlight a paradox: lottery companies aren’t targeting people based on their income. And in some States, lottery sales are decreasing. That’s a paradox for two reasons. Firstly, lottery players are disproportionately young and, secondly, they tend to be from poorer neighborhoods. The NGISC report doesn’t address whether lottery sales are targeted to low-income areas. A closer look at lottery sales shows that the problem is not the lottery itself, but where it is sold.
New York has the largest cumulative sales
According to the North American Association of State and Provincial Lotteries, the United States lottery industry generated more than $56.4 billion in fiscal year 2006 compared to $42.6 billion in FY 2005. The number of sales in New York was higher than the national average and every state reported higher sales. By the end of the decade, New York and the surrounding states accounted for more than a quarter of all lottery sales. Overall, 17 states had lottery sales over $1 billion.
In New York, lottery sales totaled $10.2 billion in 2018, up 3.3 percent from the previous year and more than 12 percent since 2015. The Mega Million, which won a record $1.5 billion in October, nearly doubled its sales – a record for the state. Powerball sales decreased by 9.5 percent, but overall lottery sales increased 3.5 percent. However, the lottery is still a major source of revenue for the state and a significant portion of the overall economy.
Massachusetts has the highest percentage return to any state government from a lottery
The Massachusetts Lottery distributes its profits to towns and cities in the state. The funds are a direct source of revenue for municipalities, and in many cases they are used to supplement the local school budgets. Although the amount given to towns and cities has fluctuated over the years, the direct lottery-profits-to-municipals ratio has been consistently increasing. Increasingly, the Massachusetts Lottery is proving to be a worthwhile investment for the state.
Last week, the Massachusetts Lottery reported record revenues and profits for fiscal year 2016. Revenue increased by 4.3% and profit rose by $1 million, respectively. If the state had not spent so much on prizes, it would have earned nearly $1.028 billion in profits and paid out the profits to the state government. But the results were good for the lottery. It is still far from the state’s highest-paying state.
States with declining sales
Some critics say that state lotteries should not cash in on federal assistance by expanding their lottery operations. But that’s not necessarily the case. A recent report by the U.S. Labor Department found that 33 million people have filed initial jobless claims since the coronavirus pandemic began. A group called Stop Predatory Gambling sent a letter to lottery states calling for them to stop selling tickets during the pandemic.
While some states have experienced a recent spike in sales, others have remained stagnant. For example, in Delaware, lottery sales decreased by 32.7 percent through April. In Texas, lottery sales were up 30% in April, but were down 13% in May. The overall figure for the fiscal year is down 5%. Massachusetts, however, has seen a bounce back in lottery sales after a particularly rough few weeks. Officials there previously thought they would lose $50 million during the pandemic, but now expect to lose just $10 million.