ROBERT SIEGEL, host:
SIEGEL: In tough economic times, you might think that people down on their luck would run out and buy lottery tickets and you'd be wrong. People are cutting back on non-essential spending and state lotteries are suffering. That's a problem, because schools, city and state budgets, even programs for the elderly rely on lottery revenue. NPR's Tamara Keith reports.
TAMARA KEITH: Picture it - a man in tattered clothes takes his last dollar and buys a lottery ticket. In the movies, he'd win big, but in real life, he probably wouldn't even buy the ticket.
Mr. BUDDY ROOGOW (Director, Lottery, Maryland): There's a myth out there that in hard economic times, people will gamble more. There's no evidence of that.
KEITH: Buddy Roogow heads the lottery in Maryland. He says lottery tickets are not a wise investment strategy, they're just entertainment.
Mr. ROOGOW: My understanding is if you look at what's going on in Las Vegas and Atlantic City, they're all suffering right now, so lotteries are not going to simply be able to skate by in tough economic times. We are not, as much as I would like to see it the other way, we're not a mandatory spend.
KEITH: Lottery sales in Maryland are flat so far this year, and this year, that's something to celebrate. Just about three quarters of lottery states have seen their sales decline. California has had one of the steepest drops. Al Lundeen, a lottery spokesman, says sales are down ten percent in the first four months of this fiscal year compared to last year.
Mr. AL LUNDEEN (Spokesman, Lottery, Maryland): We know that folks are facing more difficult times, and as a result perhaps they have less to spend on the lottery.
KEITH: Aside from the economic factors, lotteries have also had a bit of bad luck in recent months. Games like Powerball and Mega Millions, and in California, Super Lotto Plus, rely on huge jackpots to generate excitement and sales. But Lundeen says that when people win, the jackpots reset and people have been winning, so the jackpots have been kind of unimpressive.
Mr. LUNDEEN: People play those games more when the jackpots are large. In the first four months of this fiscal year, the jackpots weren't unusually large, maybe only $7 million to $50 million.
KEITH: So, the California Lottery is using TV ads like this one to try and convince people they can still get rich from a smaller jackpot.
(Soundbite of a lottery ad)
Unidentified Man: Super Lotto Plus. Isn't any jackpot worth playing for?
Ms. JEANETTE MICHAEL (Executive director, Lottery, Washington D.C.): Only in America is $100 million not enough to take a chance.
KEITH: Jeanette Michael is executive director of the Washington D.C., Lottery. She says Powerball, the multi-state game D.C. is part of, has to have a jackpot of more like $200 million before people will start rushing to buy tickets. Her lottery's sales are down almost three percent from last year. The city of Washington, D.C. reaps the rewards when the lottery makes a profit. Lottery officials had told city budget planners to expect $70 million. Now Michael says it's looking more like $68 million.
Ms. MICHAEL: If the lottery doesn't make it, then they're going to have find the money from someplace else. Or, certain services might not be provided.
KEITH: In many states, schools get the money from the lottery. In Massachusetts, home to one of the oldest and most successful lotteries, profits go to the cities and towns. Lottery Director Mark Cavanaugh says just like in past recessions, sales are down in his state. He is projecting revenue could be off as much as $200 million, which works out to about a $40 million less for the municipalities.
Mr. MARK CAVANAUGH (Director, Lottery, Massachusetts): We usually see some growth, it's unusual for us not to. But, hey, these are unusual times.
KEITH: And in these unusual times, no lottery director would encourage someone to spend their last dollar taking a chance. Tamara Keith, NPR News, Washington.
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