How to Increase Lottery Revenues


The casting of lots to make decisions or to determine fates has a long history, including several instances in the Bible. The first recorded public lottery with prizes in the form of money, however, was established in the Low Countries in the fifteenth century to raise funds to build town fortifications and help the poor. The earliest lottery tickets were priced at ten shillings, or about a quarter of the average annual wage in those days.

Lottery revenues typically expand rapidly after the start-up phase, then level off and sometimes begin to decline. To maintain or increase them, new games are introduced in a constant cycle of innovation and experimentation.

One way to increase ticket sales is to team up with companies that offer popular products as prize items, such as Harley-Davidson motorcycles or the latest movie star. The company benefits from the publicity and exposure it receives, while the lottery can reduce its advertising costs by sharing the cost of production.

Some states have begun to change the way they organize their lotteries. They have shifted away from arguing that a lottery could float a state budget and instead focused on a single line item, invariably some kind of government service that is popular and nonpartisan, such as education or veterans’ services. This shift also makes it easier for legalization advocates to reframe the issue, so that a vote in favor of the lottery is not a vote against gambling but a vote in favor of a worthy cause.