Tough economy takes an unexpected bite out of Colorado Lottery sales

Colorado residents aren’t picking and scratching as much as they did a year ago because the recession has led to an unusual drop in sales for state-sponsored lotteries across the country, the Wall Street Journal reports. The Colorado Lottery, usually considered immune to economic hard times, is on track this fiscal year to sell 5 percent fewer tickets, costing the program $25 million.

In past recessions, players continued to buy tickets, but not this time, said Jack Boehm, director of the Colorado Lottery. “Now they are thinking, ‘My retirement is gone, I might lose my job, I’d better start putting money away’ — that means fewer dollars for lottery tickets.”

Sales have fallen 2.3 percent, or nearly $5 million, since July compared to a year ago, Boehm said, “even the usually resilient scratch-off games.”

For the last fiscal year, ending in June 2008, the Colorado Lottery posted record sales of $505.8 million and distributed $122.3 million to a variety of state programs, including local parks and recreation, state parks and trails and open space acquisition, according to the lottery’s 2008 annual report [large PDF]. In addition to the outdoors, lottery proceeds benefit public school construction, chipping in $8.1 million to deal with “school health and safety issues” last year.

Lottery sales tend to rise during recessions, the Journal reports, leaving officials scratching their heads over the current slump.

The decline in lottery sales “is an unusual phenomenon,” said John W. Kindt, a gambling critic and business professor at the University of Illinois. A big proportion of lottery tickets are bought by people with gambling problems who are likely to play more in bad economic times, he said, even as intermittent players cut back.

In Texas, where sales have dropped at about the same rate as in Colorado, the state commission assembled consumers to determine why residents haven’t been dreaming as big after the economy tanked.

At focus groups held for the commission earlier this year, about half the players said the poor economy had prompted them to cut back on lottery purchases. Die-hard players — those who bought tickets in the previous month — reported small cutbacks. But 27% of less-frequent players, those who bought tickets some time in the past year, reported declines of 81% to 100% in their lottery purchases, Mr. Heith said.

Maude S. Woods, a postal worker from Arlington, Texas, said she and colleagues stop by a Dairy Mart every day to play the lottery, but that she is spending a lot less than she used to — no more than $10 a day. Everybody is worried about the economy, she said, “and I don’t have that much extra money left to use.”

Some states are already warning programs to expect less money this year and others are taking a look at expanding state-sponsored gambling to make up for shortfalls.

Not every lottery plans big changes. “We’re going to continue doing what we’ve been doing,” said Sally Lunsford, spokeswoman for the Kansas Lottery, which has seen weekly sales fall about 4.5% compared with a year ago. “Kansans are pretty conservative in general,” she said. “If they can buy gas or lottery tickets, bread or lottery tickets, they’ll probably choose gas and bread. And we certainly support that choice.”

(Gambling problem? The Colorado Lottery funds the 24-hour, bilingual Compulsive Gambling Hotline at 1-800-522-4700 and provides links to other resources for those who can’t play responsibly without some help here.)

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Ernest Luning

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