Stop Predatory Gambling

How the Texas Lottery makes more money from fewer players

by spgadmin

According to a demographic study performed at the request of the Texas Lottery Commission, the percentage of Texans playing lottery games continues to decrease. After hitting a high water mark of 71% of Texans playing the lottery in 1997, that percentage has fallen to just 38.8% in 2008. However, in that same period of time, total lottery sales have remained almost constant ($3.75 billion in 1997 to $3.67 billion in 2008). That means that the Texas Lottery has been taking more money from fewer people.

To achieve this result, the Texas Lottery had to become more predatory. They began to micro-target demographics that were more likely to purchase lottery tickets. This meant targeting low-income minority populations. According to that same demographic report, the two lottery districts that spend the most amount per month, per player are those based in El Paso and McAllen. Not coincidentally, El Paso and Hidalgo Counties were ranked 169th and 249th in per capita income in the state of Texas, with per capita incomes of $26,585 and $18,316 respectively. This is well below the Texas average of $37,083.

The second way the Lottery has been able to pull more money from less players is drastically increasing the price options for scratch off tickets. According to figures provided at the July 8, 2009 meeting of the Texas Lottery Commission [transcript should be uploaded to the TLC website soon -ed.], of the $3.2 billion in lottery sales in the fiscal year-to-date 76.7% of the sales came from instant scratch off tickets. Because of the instant gratification of these games, they are consistently the major source of sales revenue for the Texas Lottery. They currently offer approximately 100 different games, ranging in price from $1, $2, $3 all the way up to $25, $30 and $50. Comparatively, in 2000, when the percentage of Texans playing the Lottery was still over 60%, the Texas Lottery offered just 30 games; the $10 ticket introduced that year was the most expensive.

The trend is obvious: as participation drops, the Lottery has found new ways to get more money out of fewer people by introducing more scratch-off games at escalating prices.