Lottery Advertising Effectiveness and Improper Use of Proceeds


Lotteries have been in operation in many states since the 1970s, including Colorado, Florida, Indiana, Iowa, Kansas, Montana, Oregon, Washington, West Virginia, and the District of Columbia. Since the 1990s, six more states have also implemented lotteries, including South Carolina. Several issues surround the lottery, such as advertising effectiveness and improper use of proceeds.

Problems facing the lottery industry

The lottery industry is a profitable business that helps many governments meet their budget needs. However, there are a number of problems facing the lottery industry. Many politicians have resisted increasing taxes on lottery sales because they say it would harm the industry. In addition, some individuals view lottery play as unethical and immoral. Fortunately, there are a number of solutions to the problems faced by the lottery industry.

One of the most notable problems faced by lottery companies is under-funding. Ticket sales have dropped by 40% in September 2014 in Maryland. Many people are also becoming impatient because prize growth has slowed down. This can negatively impact the lottery industry’s revenue and profitability. Moreover, players are increasingly turning to multi-state lotteries for better odds.

Efficacy of advertising

Lottery advertising has a significant impact on the performance of the lottery game. In January 2011, over 66 million people bought lottery tickets, an increase of 4% from January 2010. However, compared to other forms of advertising, lottery ticket sales remain low. In this article, we will examine the pros and cons of lottery advertising and its effectiveness.

Lottery advertising is based on research on how the lottery industry reaches out to people. Lottery agencies are often more effective when they target low-income communities. The Howard Center found that lottery stores were concentrated in communities with a lower educational attainment and higher poverty rates. The lottery industry can cite various efforts to raise awareness among players, such as the “play responsibly” messages and winning odds disclosures in advertisements and on the lottery’s website. However, research indicates that most players have trouble interpreting odds-of-winning statements on scratch-off tickets and only about 20% understand them correctly.

Per capita spending by African-Americans

A recent study conducted by the Pew Research Center examined data on lottery spending by African-Americans. The researchers found that the percentage of spending is higher in counties with higher black populations. In fact, the study showed that African-Americans were more likely to play the lottery than non-African-Americans.

African-Americans spent an average of 29 percent more on lottery tickets than their white and Latino counterparts. This is despite the fact that black lottery players had lower overall gambling rates than their white and Latino counterparts.

Improper use of proceeds

In a survey, lottery respondents were more likely to continue playing the lottery if proceeds were directed to specific causes. More than half said that the proceeds should go toward research on problem gambling. Other issues include underage gambling and lack of funding for gambling research. In addition to problem gambling, the survey showed that a majority of lottery respondents believe that the proceeds should be used to fund education.