In tough times, Minnesota lottery has record sales, topping $500M

  • Article by: ALLIE SHAH , Star Tribune
  • Updated: September 16, 2011 - 10:45 AM

The state's general fund received $67.3 million from the lottery, while funds for the environment, natural resources and game and fish collected $54.6 million.

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Scratch-off lottery tickets

A sagging economy has not stopped Minnesotans from playing the odds: The State Lottery has posted a fourth consecutive year of record sales and, for the first time, ticket revenues topped a half-billion dollars.

Ticket sales for the fiscal year ending June 30 hit $504.4 million, up about 1 percent since last year, the Minnesota State Lottery announced this week.

The news left some scratching their heads, coming on the heels of reports that more Minnesotans are living in poverty and that the jobless rate shows no sign of improving.

But gambling may have its own economic logic.

Nationally, there's evidence that lottery sales rise in times of higher unemployment, said John Spry, an associate professor of business economics at the University of St. Thomas who studies the gambling industry.

The theory, he explained, is that when you buy a lottery ticket, you're paying a small amount in order to possibly win a lot. The value of that exchange is higher if you're feeling financially pinched, he said.

New census data shows that household income in Minnesota slid 3 percent to $54,785 -- the lowest level in 15 years. The number of Minnesotans living in poverty reached 10.8 percent, up from 9.6 percent in 2007-08.

"Is it because of the economy?" the lottery's acting director, Jenny Canfield, asked of the continued rise in wagers. "That may have something to do with it.''

But she also had a simpler theory -- sales have been helped by more promotion and the expansion of scratch games now sold at gas stations, convenience stores and other retail outlets.

Scratch-game tickets -- which players rub with a coin to reveal winnings -- made up 70 percent of the sales, bringing in $354.8 million. That's a yearly jump of nearly 5 percent.

Numbers games, including Powerball, totaled $142.3 million in sales. That figure is down 7.6 percent.

On the other side of the ledger, the State Lottery paid $310.9 million in winnings.

The state's general fund received $67.3 million from the lottery, while funds for the environment, natural resources and game and fish collected $54.6 million.

Many more scratch games

A few years ago, retailers sold between six and 12 scratch games, Canfield said. Today, most are selling up to two dozen scratch games, from "Wheel of Fortune" to Bingo and Crossword.

Players may purchase single scratches for $1 or multiple games for more money. Scratch books sell for $20.

State Lottery research has found that most people who buy lottery tickets say they do it because it's cheap entertainment.

"Our focus groups say things like, 'It's my treat to myself,' or 'I like to do it on my coffee break,'" Canfield said.

Some people report they buy Powerball tickets only after the jackpot reaches a certain level, she added.

"It's that chance at a dream. They say, 'Whether or not I win, it's fun talking to my family and friends about how I'd spend that,'" she said.

Those who work with people suffering from gambling addictions greeted the news with caution.

"Most people can play and enjoy the fun of it. But for the people who it does affect negatively, it can be very severe," said Cathie Perrault, executive director of the Northstar Problem Gambling Alliance in Roseville.

Allie Shah • 612-673-4488

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