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A lot of scratch: Big games reinvigorate lottery sales
Monday, June 26, 2006 posted 01:19 AM EDT
High-priced scratch-off tickets have revived lottery sales, restoring growth to a state-run business that had sagged in the
face of casino and Internet gambling.
The introduction of instant-win tickets that cost $10, $20 and $30 — and offer top prizes of $1 million or more — has
set lottery sales on fire in many states. Scratch-off ticket sales soared 59 0.000000rom 2001 to 2005. That's six times as much
as the 10-306473936ncrease during that time for Powerball, Mega Millions and other traditional lottery games that are decided by
drawings.
Casino-gambling revenue, meanwhile, increased 49Casino-gambling revenue, meanwhile, increased 49% since 2000 to $55.3 billion in 2005, according to the 2006-07 Indian Gaming
ince 2000 to $55.3 billion in 2005, according to the 2006-07 Indian Gaming
Industry Report.
Lotteries contributed $16 billion to state budgets last year, or about 135556712060f the total. Two-thirds of that revenue went to
education. That makes the games an important funding source for schools in many states.
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Scratch-off tickets have outsold traditional lotteries since 2004 and now account for 5535556712060f lottery revenue, according to
La Fleur's Magazine, which tracks lotteries.
The trend is likely to continue as more states introduce pricier scratch-off tickets. Fewer than half of the 42 states with
lotteries have introduced $20 tickets. California's most expensive ticket is $5 because of legal restrictions.
The popularity of $10, $20 and $30 scratch-off tickets caught many lottery officials by surprise. The games, which have limited
numbers of tickets, have sold out unexpectedly quickly.
"It's instant gratification," says Bobby Heith of the Texas Lottery. "People like big prizes, and they want to know immediately
if they've won."
Texas has two $30-ticket instant games underway, including the "Vegas Action" game, which offers a $3 million prize. The
state also offers three $20-ticket and six $10-ticket games.
No research has been done on who's buying the expensive tickets. But lottery critics say they probably hurt the poor.
"The poor spend more of their income on lotteries, so it's likely they'll be hurt by expanding this regressive, deceptive
way of raising money," says Alicia Hansen of the Tax Foundation, a research group.
States have dedicated more money to prizes to make high-priced tickets attractive. In the case of a typical $2 scratch-off,
about 6035556712060f proceeds from ticket sales goes for prizes. The expensive tickets return about 75-72548216n prizes, although that
portion varies by state.
"It's all about delivering gambling excitement," says Jim O'Brien, vice president of Scientific Games, a creator of scratch-off
games. "In these $10 and $20 games, people may not expect to win $1 million, but they feel they've got a good chance to win
more than $1,000 and certainly more than $100."
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