Lottery revenue mostly steady, despite economy - East Valley Tribune: News

Lottery revenue mostly steady, despite economy

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Posted: Sunday, October 12, 2008 7:07 pm | Updated: 9:11 pm, Fri Oct 7, 2011.

"It's just a buck," Todd Babel said as he left a convenience store holding a Powerball ticket giving him a 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 revenue has 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 revenue 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 revenue was 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 the 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.

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