Texas, Arkansas and Montana lead the way in post-COVID lotto revival

A report produced by the Associated Press indicates that in spite of the COVID-19 pandemic some states have managed to thrive through the crisis. The states of Texas, Arkansas and Montana, for example, have all seen increases in lottery sales driven by scratch-off tickets. 

Others, such as Massachusetts and Oregon, have fared less well according to the report, experiencing revenue drops due to stay-at-home orders that impacted the retail industry and were exacerbated by a lack of an online presence.

The lottery sector was initially expected to benefit from the pandemic and the resulting economic downturn due to previous studies having shown a correlation between a rise in unemployment and increase in lottery sales.

David Just, Cornell University business professor, stated: “We have known for some time that people end up playing the lottery more often or with more of their dollars when they get put in dire circumstances, when they have a drop in income.

“Unemployment is one of the potential big drivers for something like that. We saw that at the beginning of the pandemic. Massive rises in unemployment, you would expect, would lead people to this place where they want to take more risks to try and get back what they’ve lost.”

Regarding the rise in Arkansas, Scholarship Lottery Director Bishop Woosley attributed the sales spike in his state to low gas prices, a lack of other entertainment options and boredom. 

Similar trends were seen in Montana. The Treasure State, which has experienced a sales increase of $1.4m between March and May to over $16m, has seen most of its growth driven by scratch-off tickets, which jumped 83% compared to last year. 

Scratch-off tickets were also a big driver in Texas which experienced a sales increase of over $155m this fiscal year and more than $753 million compared to the 2018 fiscal year. In fact, the Lone Star State saw scratch-off’s increase by 10% over the last fiscal year following 20,000 retail locations being deemed essential services.

Despite some state lotteries benefiting throughout this period, not all organisations have been impacted in the same way with Delaware’s lottery sales off by almost $40m through May compared to the last fiscal year.

According to state data this has occurred mostly due the closure of casinos as well as other factors such as a drop in revenue from big-money games like Powerball, which in turn resulted in jackpot amounts being lowered. 

Virginia saw sales drop 21%, just over $45m, and despite being 9% up in May remains 8% down for the fiscal year. Massachusetts finds itself in a similar situation with the lottery currently down 5% for the fiscal year following drops in sales of 13%, 30% and roughly 10% for the months of March, April and May respectively. 

The report has attributed this decrease to the fact that unlike in Texas which kept many retail outlets open, Massachusetts temporarily closed over 1,500 establishments due to the pandemic, thus limiting locations in which players could spend money and interact with the organisation. 

Massachusetts Municipal Association’s Executive Director Geoff Beckwith, commented: “Declining state tax revenues and Lottery proceeds are a serious budget concern, yet the Massachusetts Municipal Association firmly believes that the state’s future depends on protecting local aid and K-12 education funding.” 

Despite the poor performances so far, as states begin to reopen some of the hardest hit lotteries are bouncing back, with Virginia and Maryland both witnessing recent lottery sales recoveries as officials predict profits to now be $10m below original projections as opposed to the $50m below evaluation that was given in the midst of the pandemic. 

Gordon Medenica, Maryland’s lottery and gaming director, concluded: “Since [April], they have rebounded remarkably well. In the month of May, we actually had our all-time best month for the year in both sales and profits. Instant tickets have been booming. Our daily numbers games have been booming. Lottery is doing really well.”