In recession, many see lottery worth the gamble

updated 3:22 p.m. ET Jan. 11, 2009

NASHVILLE, Tenn. - In these tough times, many people appear willing to gamble a few precious dollars in the hope of winning instant deliverance from their economic woes.

More than half of all states with lotteries have reported rising sales over the past six months, and some researchers say financial insecurity might be driving people to risk more of their money than usual on $1 and $5 instant scratch-offs and other daily games in hopes of a big payoff.

"Someday somebody is going to win and I hope it is me," said Albert Atwood of Nashville, who spends $100 weekly playing the Pick 5 and Lotto Plus. "I imagine that I would be a heap better off if I saved this money, but everybody has dreams."

Driven by regulars like Atwood and a growing number of occasional players, 25 of 42 states with lotteries have experienced higher sales of scratch-off and daily lottery games since July, according to Scientific Games, a maker of scratch-offs.

• In Washington, D.C., instant sales reached a record of $45 million in the 2008 fiscal year, representing an 11 percent year-over-year increase.
• In Tennessee, sales of instant lottery games were up $8 million during the fiscal first quarter ending in October.
• The Massachusetts lottery reached a record of $4.7 billion in sales during the last fiscal year, up from $4.4 billion in the previous year.

Nationwide, instant and daily lottery revenues have been on the rise since 2004, according to U.S. Census Bureau data.

States' revenues from multistate lotteries, such as MegaMillions and Powerball, have dropped. But industry officials say sales of those tickets tend to fluctuate as the value of their jackpots rise and fall. If there is no winner one week, the size of these jackpots increases the following week.

Some experts say economic hardships prompt people to justify small-stakes gambles even as they cut back on nonessential goods and services. Others pin the increased lottery activity on creative marketing by scratch-off makers and state governments, which cannot afford to lose this revenue stream at a time of extremely tight budgets.

Scientific Games Chief Executive Lorne Weil said states are doing whatever they can to keep sales from falling. "They are consciously working with us to launch new programs, offer tickets at new price points and increase the number of retail outlets," he said.

D. Morris / AP

By law, many states' lottery revenues are designated toward education, parks or recreation and cannot be put into the general fund to help meet budget shortfalls in other areas.

Two out of every five states with lotteries are experiencing falling sales, according to Scientific Games' research.

A Rockefeller Institute of Government study released in June says that revenue is at an all-time high but growth has slowed to about half of its long-term annual growth rate of 5.1 percent.

In Georgia, instant ticket sales increased by 7 percent from September to October of fiscal year 2008 but just 2 percent from September to October of fiscal year 2009.

"Scratch-offs are more addictive than other lottery games because they are inexpensive and purchased almost anywhere," said Gail Howard, author of Lottery Master Guide and New York Lottery News columnist. "People are playing because they hope to score so they can have something in their pockets."

The urge to wager on lotto does not extend to casinos with wavering gas prices and the prerequisite for vacation time contributing to a revenue decline at gambling destinations like Las Vegas.

MORE FROM ECONOMY AT A CROSSROADS

Economy at a Crossroads Section Front

Construction on new homes rebounds   Consumer prices rise, boosted by energy costs Homebuilder outlook dips despite tax credit Great Recession spawns biz buzzwords Industrial production rises more than expected   Fed may sound upbeat note on economy Economy points to recovery; inflation looms Economy gets tidings of hope for holidays NYT: Poll reveals depth and trauma of joblessness Europe leads in bonus crackdown, is U.S. next? Economy at a Crossroads Section Front   Add Economy at a Crossroads headlines to your news reader: