Between 2014 and 2015, lottery revenue declined in 22 of the 44 states that offer the games, and 21 states also posted drops from 2013 to 2014. In the past year, about half of Americans bought a lottery ticket, down from 57 percent in 1999, when only 37 states had lotteries, according to a 2016 Gallup poll.
One reason for the decline, according to David Brunori, a professor of public policy at George Washington University, is so-called jackpot fatigue, caused by decreasing lottery play until jackpots get dramatically large. Others include lack of interest from millennials and competition from other forms of gambling.
For example, the West Virginia Lottery’s revenue fell 2.6 percent in 2016. Gamblers there have been lured away by the state’s own casinos plus new ones in nearby Maryland and Pennsylvania. In Rhode Island, lottery revenue dropped 3.2 percent in 2016. In Missouri, revenue was down 3.3 percent in 2015.
Brunori noted in 2015 revenue in the 44 states with lotteries was about $21.4 billion, although states raised $2.2 trillion by all methods of gambling. But, he said, “it’s $21 billion in taxes they don’t have to impose on people, and that’s 99 percent” of the reason states run lotteries.
The reliance on lottery income for education, environmental protection, tourism and other purposes means states must constantly try to keep players interested with new games and new ways to win. To boost interest and raise more money for the 44 participating states, the multistate Mega Millions consortium recently announced it will raise ticket prices from $1 to $2 starting in October and restructure prizes. In West Virginia, for example, lottery spokesman Randy Burnside said 40 new instant games are introduced every year. “You have to stay up with the industry practices with your gaming mix. It’s a constant process of game development and introduction,” he said.
Brunori also said states are using more sophisticated advertising campaigns and increasing their advertising budgets to attract and keep players. Earlier this year, Massachusetts State Treasurer Deborah Goldberg, who oversees the lottery, asked the legislature to raise the lottery’s advertising budget from $8 million to $10 million to help it better compete with casinos. “It’s very critical as we move into this new era we focus on the fact that we will be competing with those that have had the capacity to brand themselves,” Goldberg said.
