The biggest loser in the lottery game? Increasingly, it's the states that rely on lottery revenue, as fewer people are buying tickets of chance.
In 22 of the 44 states with lotteries, revenue declined between 2014 and 2015, the most recent year for comprehensive data, the Pew Charitable Trusts reported Thursday. Twenty-one states experienced declines from 2013 to 2014.
In 2016, lottery revenue fell 3.3% in Missouri, more recent data shows, while it fell 3.2% in Rhode Island and 2.6% in West Virginia. Officials in many other states are facing similar numbers.
The research blamed "jackpot fatigue," which is a drop-off in regular lottery play until the pot reaches headline-making size. Demand is also in retreat as fewer millennials play and because of competition from other forms of gambling, especially casinos. Some states have increasingly allowed video slot machines in bars and restaurants.
Combined revenue in the 44 states that have lotteries was about $21.4 billion in 2015. That's a fairly thin slice of the $2.2 trillion that states raised by all methods in 2015. Still, "it's $21 billion in taxes they don't have to impose on people, and that's 99%" of the reason states operate lotteries, David Brunori, a professor of public policy at George Washington University who has written about state tax policy, told Pew.
Some states funnel lottery money into the general budget, but most earmark it for a specific purpose. Colorado uses it for environmental protection, for instance, while in West Virginia the lottery helps fund schools, senior services and tourism—a television ad there pipes out its push for lottery play over footage of white-water rafting. Some states are well aware of the pressure to keep players coming back; the Massachusetts treasurer this year asked the state legislature to increase the lottery's advertising budget to help it compete with casinos.
One way to gauge lotteries' importance to state budgets is to compare its revenue to what's pulled in with corporate income taxes, another relatively small, but important, source of state dollars. Corporate income taxes amount to an average of 3% of state revenue, while the lottery contributes 1% of state revenue, according to Pew. In a handful of states, lottery revenue rivals or exceeds corporate income tax revenue.
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I believe the big lotteries cut off their nose to spite their face. PB raised the price and if memory serves me allegedly made it easier to win. Now MM will follow suit in October raising the cost of a ticket 100%. It doesn't help with negative press about states not paying on this voluntary tax winnings due to state budget woes.
yes i agree they keep upping the price and the odds 300 million to one or so is impossible to win to begin with,iits only fun to buy a ticket when the jackpot is high
its still my opinion all these games are rigged even though they dont have to be...or do they>
Jackpot-fatigue is the punishment of the lottery companies for creating too-hard-to-win lotteries.
Lotteries, by and large, rely on most players being near totally ignorant of the odds of the games being offered combined with horrible payback low as 40%. For a long time the strategy has worked due in large part to the novelty of games offering higher and higher jackpots at a nominal cost. $1 for a dream.
However, that model is waning as the jackpot amounts no longer generate much excitement. $10 million annuity was once a big deal (yes really, way back), then later over $100 million (long lines and news coverage of PA Super 7 run up to $115 million in 1989 was crazy), and finally topping out at $1.5 billion annuity (nearly $1 billion in cash). Increased ticket price along with worse odds than ever dissuades many from even bothering with the lottery.
In many jurisdictions, casino games are legally required to payback anywhere from 80% to upwards of 95%. In contrast, lottery numbers games tend to be around 50% to 60% tops with instants generally paying back 60%-75%. The main reason casino payback is so high is to keep players coming back for more.
Lotteries need to do the same thing, if they wish to remain relevant. Many lottery officials are aware of this issue, but are often constrained by laws that strictly limit the percentage amount of sales proceeds that can be allocated to prizes with little to no room for compromise. Give back more and earn more. It's worked for lotteries that have been able to do it, such as Pennsylvania. Though even PA Lottery payback, while improved marginally in recent years, still falls very short of what casinos offer.
Many lotteries are betting that on-line play options will be the ticket to growing revenues. And they're likely right. Though, key is to proceed in such a way that the games are unique from other gaming options to avoid cannibalization, such as by online casinos and remote video gaming (at bars, clubs, airports, etc). Be interesting to see how it plays out.
I agree. And maybe people don't trust lotteries anymore. RNG draws don't help either.
The lotteries Have gotten more greedy over the years with the addition of extreme stratch off prices.These games are being pursued by people of low poverty to the fading middle class. Being a player of pick 4 &pick 3 games, I have constantly listened to fellow players complain about how difficult it is to win in the lotteries drawings. If an individual does'nt win from time to time they simply give up playing regularly or quit all together. remember the rich dont generally play.They dont need the money they already have it. Cater to the players that have to go to work everday to make financial ends meet!
People rarely win my state lottery -- 1-2 a year and the lower prizes are an embarrassment. It didnt use to be that way, so of course they are going to lose money. The second chance promo was good initially but they managed to ruin that, too.
Yep, besides people rarely winning the large state jackpot, my biggest gripe is that even the smaller prizes are rare and chintzy.
Good because if they spread the love and actually let many
win instead of just one or two people like they always do then you'd
have a line out the door waiting to buy tickets.
Ron,
Please pardon my ignorance, but it's not completely clear to me what you mean when you say "payback."
To my mind, payback means the amount of money any state lottery would return to players via winnings. So if any given game pays back 40%, then out of a pool of $100,000 wagered by players, the state would keep $60,000, and return to players $40,000 via winning tickets. Maybe I'm correct, but my gut is telling me that's overly simplistic. Thanks! G5
For us it's the lack luster lower tier payouts.
The payouts don't reflect the odds (probability of win).
This is in addition to devaluing the hard earned dollar and crippling a player's purchasing power by jacking the price of a play to $2.00; $3.00 if you play the multiplier.
Nope, we're playing some our last Mega Millions till Oct 31; then there's a ghost of a chance they'll get our money again.
Maybe when it's at $3 Billion we might consider.
Last Saturday, The Pennsylvania Lottery conducted it's twice per year "Millionaire Raffle". The PA Lottery has been holding this raffle since 2004. This time, the raffle was enhanced with 9 "Early Bird" drawings which was an effort to entice players to buy tickets early in the sales cycle. By purchasing a ticket during the any given week of sales, all tickets sold during that particular week were entered into a special drawing where one ticket number was drawn, and if you had it, you won $100,000, and your ticket was still eligible to win the top prize of one million dollars at the end of the raffle. The odds of winning $100,000 during each of the nine weeks of Early Bird Drawings were approximately 30,000 to 1.
It seemed to work, the average number of tickets sold per day was approximately 4,000. (Usually in these raffles, players hold off until the bitter end, and buy their tickets immediately before the drawing - when ticket sales skyrocket to a rate of 20,000 per day.) I would also point out that even with the addition of Early Bird drawings, all 500,000 tickets were not sold. Instead approximately 400,000 were sold, so it wasn't a sellout. Although that sucks for The PA Lottery, it was good for players. Even so, congratulations are in order to the PA Lottery for doing a little innovating. I might add too, that an excellent suggestion to further improve the raffle appeared in a thread here at The LP regarding this particular PA Millionaire Raffle.
My point is this; If the state lotteries want to lure the players back, then listen to the players and implement some new and innovative approaches that award more smaller prizes. The players will come back, but ya gotta treat 'em good if ya want their money. IMHO, players are just a tad smarter than state lotteries give them credit for being.
As for me personally, I vote with my feet. I live in the State of New York (60 miles from The PA border) and because NY doesn't offer a raffle, I've no problem driving an hour over to PA, and spending my money over there. G5
lower tier payouts are trash...
example: I have gotten 4/5 in Show me cash 3 or 4 times over my years of playing. And while the top tier is multi-thousands of dollars. the best I can get is $250 bucks for 4/5? Really? I mean the last 1 I missed was 400,000.00 and I got $250 bucks?
Even got 5/6 once in a game where the 6/6 was 2.1 million at the time. so what do you think my take would be for 5/6? I didn't even break a thousand bucks. So I went from 2.1 MILLION dollars to less than a 1000?. yeeeah.
I mean I don't care if the top prize only increments at a snail's pace as long as the lower tiers makes it worth while to play at all.
Also US lotteries could, instead of one major Olympic JP @ 10Mil, offer10 chances of 1 Million each- spread it around like fertilizer and see participation grow hence the TX sales zoom - it's proving very popular in Europe.
Lotteries, take a chance-
Eddessa_Knight wit Lucky Light for Lots
I am one of the few that I have seen actually playing regular pick 6 lotto game here in Illinois in my area
In past people have commented "No one wins that" and complain about what is often an endless amount of rollovers
With odds of 1:20,358,520 to win jackpot that tends to happen often and can make people play less or give up on game
Personally think Illinois should drop matrix back to former 6/48 instead of current 6/52. 6/48 matrix odds for jackpot would be 1:12,271,512
Also they turned former Little Lotto pick 5 game into Lucky Day pick 5 while changing matrix from 5/39 to 5/45 thus making it harder to win jackpot. That has meant increased size of LDL jackpots but far fewer wins
I think players would prefer return to Little Lotto with more winners of 100-350k then constant rollovers with wins few and far between
lol, and don't even get me started with the RNG (computer) drawings. My fingers would fall off from writing a book on how many ways that is such a BAD thing.
Can't remember the Michigan lottery game that the guy told me @ the MI lottery that it was a ball drawing and two members said it was RNG. They never quite answered me email question, wanting me to call AGAIN. i figured it was as LP members said RNG. Screw them I say and to heck with RNG.
Here is what Michigan is. From the LP state lottery report card.
Michigan (64% true lottery drawings)
True Drawings: Daily 3 Evening, Daily 3 Midday, Daily 4 Evening, Daily 4 Midday, Lucky for Life, Mega Millions, Powerball
Computerized: Classic Lotto 47, Fantasy 5, Keno, Poker Lotto
It's nice to see everyone come together and be angry at the same things.
BURN IT DOWN!
Recent lottery scandals, Tipton's and others shenanigans and such don't help.
State tax does not help since I play based on the after tax amount, not what is advertised.
Another thing is states keeping unclaimed prizes...should be rolled into other JPs
Yeah, Jackpots are nothing more than an attractive nuisance.
You win more often with less numbers.
Yea sure this is the reason and how states run the lottery has nothing to do with it.
Correct. A simple example is the recent PA Lottery raffle. $10 million worth of tickets offered with $5,089,200 allocated in prizes; ~51% payback, which is typical of most lottery numbers games.
However, payback percentage alone isn't the end all be all, if much of the prize pool is allocated to very difficult to win top prizes. This is how some casinos can offer games, typically slots, near or even exceeding 100% payback and still make money. Few players have enough time nor big enough bankroll. Exception being some progressive jackpot video poker games, which can often be realistically hit within a few days or less (especially if one partners with others) of hard playing with a modest size, relatively speaking, bankroll.
With all that said, payback, while also taking into account other factors, should be an important consideration when playing...
Ideal lottery games feature a good distribution of prize tiers with somewhat realistic odds of winning combined with decent payback. For example, PA Treasure Hunt (5/30) game fits this criteria well. Odds of jackpot, starting at $10K ($30K-$80K is common), is 1 in 142,506. Not a cinch, but well in the realm of possibility for a regular player playing frequently over many years. More to the point, even if one never hits the jackpot, the game pays $100 for matching 4 of 5 (1 in 1140), $6 for matching 3 (1 in 47.5), and $1 for matching 2 (1 in 6.2).
I remember in the 80's in New Jersey, they had a $1 Pick 6 that my father used to win all the time, and you had to get 4 out of your 6 numbers in order to win a prize! Back then it was 6/39 and parimutuel. He would wait for my little sisters to come home from school and ask them what numbers he should play. He had the wall next to the kitchen table littered with winning tickets (apparently, they let him keep them after he cashed out). Most of them were less than $100, some $200-300 Pick 4s, and one time he won a couple of thousand! It was his little hobby, and it delighted the girls when they came home from school and he would announce "We Won!" and take them to Dairy Queen. The Pick 6 is 6/49 now and it's difficult to even win $3 these days! And the Lottery Commission wonders why no one wants to play their games anymore.
i am racking up cash $ on p4 game in my state and pick 3. Better odds/easier for me,and i love that.
Maybe, as my father say, just maybe Cassie, if "the states each one give it to more winner's, and not I.E., "1"winner for 30 million to 100 or 500 million,then people will try more to win."I agree. So i do not really play bigger games.
I am happy with p4 wins like today ALMOST 8,000.00 done!(1 number and multiple x brought me in this big win.)as all summer off/on.
so good luck to all.
Yes you got it rigged. Atleast we are smart enough to see that because there are many people who failed to realize that the lottery is rigg. They have a certain to win it for example, you will always mostly see jackpot winner from Ohio, Florida and Tennesey also California. These states are fix to win most jackpot lets just say of you live in New york or other states, don't even waste time to much because you ain't gonna win a lotterry jackpot there easily. As we already they know where the jackpot gonna win and it's fix.