Fifty-dollar scratch-off redux

You may need to sit down for this one: Those fifty-dollar scratch-off games that the Texas Lottery pushes on the public in the hope of luring richer people to play, are instead mostly bought by not so rich folks.

The Chronicle looked at each of the state's ZIP codes with at least 1,000 adult residents, dividing them into groups based on their median household income in the 2000 census.

The analysis found that sales of the $50 Spectacular surged across middle-income ZIP codes, seeing strong per-capita sales in areas both with incomes of just more than $30,000 and in those with earnings upwards of $50,000 and $60,000.

Sales figures dropped off in both rich and poor areas, although the state's poorest ZIP codes -- those with median incomes of $20,000 or less -- saw stronger per-capita sales than the richest, with incomes of $90,000 or more.

While the analysis is imperfect because it does not account for people who may buy lottery tickets in a ZIP code where they don't live, and whose incomes may differ from the median there, it bolsters numerous other studies indicating that lottery games tend to be most popular among the non-affluent.

If you're thinking you've heard this story before, you have. Nothing much has changed since then.

"The $50 ticket salvaged our entire fiscal year last year," said Robert Tirloni, projects manager for the Texas Lottery Commission, bringing $137 million to state coffers since the game's debut in May and helping the commission close a $93 million gap in revenue between 2006 and 2007.

Texas lottery commission spokesman Robert Heith said the games are voluntary and are designed to entertain. He added that his agency has one overriding mission: to generate revenue for Texas public schools. Last year, more than $1 billion of the $3.8 billion raised from lottery sales went to public education.

The $50 scratch-off game did so well in Texas that the state, without fanfare, launched in November a second $50 game called $130 Million Payout Bonanza. Together, the two games have generated $158 million in revenue.

[...]

The state has pondered introducing a $100 ticket and last year ordered up a study to determine whether enough Texans would embrace it. Tirloni called a $100 ticket "the next step, though we're not there yet."

He added, "Whenever we put out a (higher-priced ticket), it's been successful."

Okay then. Why not take this to the logical extreme? Introduce a $1000 lottery ticket, to be sold only in high-end retail outlets. If the goal is to increase revenues without doing it on the backs of the poor, let's be direct about it. Something tells me that will never happen.

Posted by Charles Kuffner on January 15, 2008 to Jackpot!