How Lottery Advertising Affects State Lottery Revenues

In a lottery, players invest small sums of money for the chance to win a large prize. The odds of winning are typically very low, but the winners can be life-changing. Lotteries are often associated with gambling, but they also can be used in decision-making scenarios like sports team drafts and the allocation of limited medical treatments.

It’s important to understand why people buy tickets, even if they know their chances of winning are slim to none. Lottery advertising presents the purchase of tickets as a risk-free investment with an enormous payoff. It shows prior winners, and aspiring ones, living their new lives of wealth. These narratives are designed to appeal to the aspirations of ordinary people.

Lottery ads also rely on the message that the proceeds from the lottery benefit a specific public good, such as education. This argument is particularly effective when state governments are experiencing fiscal stress. However, studies have found that the popularity of a lottery does not correlate with a state’s objective financial condition.

The majority of lottery play is from individuals who are below the poverty line, less educated, and nonwhite. This player base has a disproportionate impact on state lottery revenues, as they contribute the most to ticket sales. The influx of new games helps lottery revenues expand dramatically shortly after a lottery’s inception, but eventually these revenues begin to level off or even decline. As a result, the lottery must continually introduce new games in order to keep revenues growing.