Lottery Sales and Revenues


The history of lotteries goes back a long way, but its modern form is a relatively new one. The practice of drawing lots to determine ownership of property is recorded in many ancient documents. In the late fifteenth and sixteenth centuries, drawing lots became common throughout Europe. In the United States, lotteries first became tied to public funding in 1612, when King James I of England introduced a lottery to help fund the settlement of Jamestown, Virginia. Since then, lotteries have been used by public and private organizations to raise money for public projects, such as building schools and colleges, or completing other public works.

According to the North American Association of State and Provincial Lotteries, U.S. lottery sales reached $56.4 billion in FY 2006, an increase of 6.6% over the previous year. In the period from 1998 to 2003, U.S. lottery sales increased steadily, by a factor of nearly three. For this reason, there is a strong case for increasing the amount of money being spent on lottery-related projects. Moreover, many people find enjoyment and satisfaction in playing the lottery as a form of entertainment.

A recent study examined the role of entrapment in lotto games. It found that 67% of lottery players use the same set of lottery numbers week after week, either based on their lucky numbers or their birthdates. In addition, the statistics also showed that players do not get discouraged if their numbers are not drawn. This behavior is known as the gambler’s fallacy. People who are entrapped in the game of chance become more likely to develop serious gambling problems as a result.

As far as state lottery revenues go, the figures are rather bleak. While state lottery revenues are a significant part of state budgets, they are relatively low compared to the revenues generated by income and general sales taxes. A study by Charles T. Clotfelter and colleagues at the turn of the century revealed that the lottery is responsible for only 0.67% of state general revenue, while general sales taxes account for nearly half of the revenue from state lotteries.

Some lottery games are sponsored by companies or sports franchises. Recently, the New Jersey Lottery Commission announced that a $100,000 Harley-Davidson motorcycle scratch game prize would be awarded to the winner of a New Jersey lottery. Another popular lottery game is the basketball lottery, which determines the draft picks of 14 of the league’s worst teams. The winning team gets the chance to choose the best college talent. The lottery offers millions of opportunities to make money.

Despite its widespread popularity, lottery retailers earn a commission on every ticket sold. In exchange, retailers get a percentage of the proceeds from the sales. Incentives based programs are available in most states, including lottery retailers. For example, the lottery in Wisconsin offers bonuses to retailers who sell more lottery tickets than usual. However, there is no limit on the number of lottery retailers in a state. As of 2010, no state has put any limits on the number of retailers that sell lottery tickets.