February 01, 2005
Lottery in decline

You can make whatever observations and draw whatever conclusions you want about the demographics of Texas Lottery players. To me, the big story is right here:

Fewer people gambled on Texas Lottery games last year than ever, but those who did press their luck spent more than they did two years ago, according to a new study of lottery players by Texas Tech University.

About 47 percent of Texans reported playing a Texas Lottery game in 2004, down from 56 percent two years ago the lowest percentage since the lottery came to Texas in 1992.

That last clause might make you think we've reached or dipped below the 1992 level, but look at the graph. We hit a historical low in 2000 and have continued to decline since. The only thing that's saving the Lottery from being a fiscal disaster is (let's be blunt here) people who have a gambling problem.

[T]he average amount spent by a lottery player in 2004 was $44.55 per month, compared to $38.13 calculated in a similar study two years ago.

"So we have fewer people reporting having played, but they're actually spending more money when they're playing," said Brian Cannon, operations director for the laboratory that conducted the survey, in giving his report to the Texas Lottery Commission.


Although the percentage of people playing has dropped, the Texas Lottery income has increased, said Bobby Heith, lottery commission spokesman. Overall sales in 2004 were $3.4 billion, compared to $3.1 billion in 2003. Last year, the revenue for the state was $1.1 billion, up from $888 million in 2003.

Gerald Busald, a mathematics professor at San Antonio College whose students studied the report, said the numbers show more than minor increases in individual spending on state-sponsored gambling.

"There is a greater percentage of people who have a gambling problem with the Texas Lottery than ever before," Busald said. Responding to the charge that more people have gambling problems, Heith said the commission doesn't use the surveys to determine whether problem gambling has increased.

"I would say that people who read these things will draw their own conclusions," he said. "We have a problem (ed. note: I presume he means "a program") out there that is called 'Play Responsible,' and we put that message out on the back of our tickets and on our Web site."

About a dozen of the 1,255 respondents to the survey said they spend thousands of dollars a month on lottery tickets. The report presents two sets of data, one that includes the dozen and one that doesn't.

When these players who spend an average of $1,515.64 on tickets are included, the overall average monthly spending among all players increases from $44.55 to $76.16. Researchers could not determine whether these individuals were unusual players or if they were fabricating their responses, and Cannon said they were not included in the core of the report.

What I'm getting at is this: The Lottery is in decline. That decline may be masked by its still-decent revenue numbers, but as fewer people play it, and as more of those who do have gambling problems, political support for the Lottery will decline. What that means isn't fully clear, since it's not gambling that's becoming less popular but this particular form of gambling. I don't know if people will still accept video slots or whatever the latest gadget is as a legitimate, stable, long-term, non-tax revenue source, or if they'll feel they've heard it all before. And as long as the Lottery still makes money, I don't expect it to go away - more likely, there will be continued tinkering with odds and payouts as a way of (futilely, in my opinion) getting more people to play, plus a steady stream of new games - but I think the day where someone makes a serious proposal of radical change to the system is in sight. I don't know what that might be, or who might make it, but I think it's coming.

Posted by Charles Kuffner on February 01, 2005 to Jackpot! | TrackBack

If the state can figure out how to make money off of the Poker games that are being run on a daily basis, it won't need a lottery. Heck, if the state can figure out how to make money from the Poker chip sets being sold on Ebay alone, it won't need a lottery.

The state of Texas making money from Poker? Now, that's real Texas Hold 'Em. :-)

(all that for a joke. Maybe I should have put the Bad Joke Warning up first.)

Posted by: William Hughes on February 1, 2005 1:29 PM

Hopefully Bush, Perry, et.al. will point to this as proof of the Texas education miracle... A majority of Texans now understand basic math...

Posted by: Jim D on February 1, 2005 3:16 PM