A Cronkite News Service Weekend Special
Despite tough economy, many Arizonans still playing the lottery
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By MEGAN THOMAS
Cronkite News Service
PHOENIX _ “It’s just a buck,” Todd Babel said as he left a convenience store holding a Powerball ticket giving him chance, however small, at $20 million.
“I do it just for fun,” Babel said. “I don’t buy 10 at a time or anything like that.”
The tough economy hasn’t kept many other Arizonans from playing either.
As Arizona’s economy has slid over the past year, lottery revenues have remained relatively steady, the figures show.
The Arizona Lottery took in a record $473 million during the fiscal year that ended in June. Assuming a steady rate of population growth, per-capita sales were roughly equal to the year before.
Lawmakers examining the state’s budget deficit have said a recent dip in lottery revenues endangers projects such as a $1 billion construction plan for state universities. But Art Macias, the lottery’s executive director, said those concerns, based on data for the fiscal year that began in July, don’t take into account a whopping Powerball jackpot that drove up sales the year before.
A review of lottery figures shows that revenues were down 3.4 percent in July through September compared to the year before. But Macias said factoring out increased sales from the Powerball jackpot that topped $300 million in August 2007 would have the lottery ahead by 2.4 percent so far this year.
Fred Solop, a professor and chair of Northern Arizona University’s political science department, said he wasn’t surprised that lottery sales are holding up. He said that during economic downturns people often will look to the lottery hoping for a little luck and a little extra money.
“It really represents, I think, at some level, people’s hope for better times ahead,” Solop said.
Solop heads NAU’s Social Research Laboratory, which released a poll in April that found more Arizonans were playing the lottery. Solop’s analysis connected the increase to the economy, but Macias said at the time the lottery’s data showed no such connection.
Timothy James, an economics professor at Arizona State University, said lottery tickets can be more attractive to some people in a bad economy than in a good economy.
“So maybe there’s a bunch of people out there who are buying lottery tickets in the desperate hope that they might win some money that would get them out of their financial malaise,” James said.
The New York Times reported last month that 29 of the 42 states with lotteries reported increased sales during the most recent fiscal year. It said 22 of those states set sales records.
Macias said new products, better marketing and more generous prizes, not the economy, are behind the lottery’s continued strength. He noted that revenue during fiscal year that ended in July, despite being a record, was relatively flat compared to the growth the lottery has seen over the years.
According to the lottery’s figures, sales were up 2.3 percent in fiscal 2008 after declining slightly in fiscal 2007.
“The easy thing to do is to declare that lottery products are somehow recession-proof, but they are not,” Macias said.
Macias said the lottery has shown very little correlation with the economy, positive or negative, over the years. He said people play the lottery because they know it supports state programs and because they like the variety of products and the potential of winning.
“Especially in this economy, we’re talking about good entertainment value for a dollar or two up to $20 and you can have a bit of entertainment and a chance at winning some good prizes,” Macias said.
He said the Arizona Lottery plans to respond to the down economy by boosting advertising, increasing the number and sizes of prizes and putting more vending machines at a variety of locations such as big-box stores.
For those who might see the Powerball, Scratchers and other games as a way out of financial trouble, Macias said the lottery sends a clear message that it is purely entertainment.
Kerry Carmichael continues to play the lottery for entertainment even after a $2.5 million jackpot in 1995 allowed him to retire with his wife. While buying Powerball and Scratchers tickets at the lottery’s headquarters on a recent afternoon, Carmichael said lottery players should spend only what they can afford to lose.
“If you’re taking the milk money to play the lottery, that’s not a good thing to do,” he said. “But if you’ve got an extra two dollars a week, buying the lottery ticket every draw is not a bad use of that money. Somebody’s got to win.”
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Web Link:
_ Arizona Lottery: www.arizonalottery.com
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Click thumbnails to see full-resolution images and download; caption information is in the file under File>File Info.
CAPTION FOR BC-CNS-LOTTERY SALES: Art Macias, executive director of the Arizona Lottery, says new games, improved marketing and better prizes have helped the lottery keep sales up despite the tough economy. The lottery is coming off a record year for revenue, and adjusting for population growth suggests that per-capita sales remained steady through the fiscal year that ended in June. Macias says suggestions that lottery revenue is down for the fiscal year that began in July fail to take into account a whopping Powerball jackpot that caused sales to spike a year ago. (Cronkite News Service Photo/Megan Thomas)
CAPTION FOR BC-CNS-LOTTERY SALES: Kerry Carmichael shows tickets he purchased Thursday, Oct. 2, 2008, at the Arizona Lottery’s headquarters in Phoenix. Carmichael used $2.5 million in lottery winnings to retire. He says people should play the lottery for entertainment and shouldn’t spend money on lottery tickets that should go toward necessities. (Cronkite News Service Photo/Megan Thomas)