State Lotteries Boom in Tough Economic Times

In a tough economy-spending on everything from cars to electronics to vacations takes a hit. But at least one luxury items has seen sales increases: Lottery Tickets.

Records for 41 state lotteries show that 28 showed an increase in sales in fiscal year 2010 compared to the previous year, the USA Today Reports. Out of those, 17 state lotteries reporter all-time highs.For example, Arizona posted a record $583.5 million in ticket sales for 2010, and Missouri topped $1 billion for the first time.

An increase in the sale of lottery tickets can be beneficial for cash-strapped states. Some states put lottery winnings in the general fund, while others earmark revenue for specific purposes, notably education.

But some say this has led lower-income people to pick up the tab on budgetary problems. According to a 2004 study by Cornell University, lottery sales tend to go up when the economy dampens, the newspaper reports. In addition, multiple studies have shown that lower-income individuals tend to buy lottery tickets at higher rates than their more affluent counterparts.

If what looks like is going on is actually going on, states are solving budget shortfalls with what effectively amounts to a regressive tax on the poor, said Garrick Blalock, the co-author of the study.

Others have a different take on the situation.

If responsible adults want to decide how they want to spend their entertainment dollars, it's a little trite to say 'You shouldn't spend that much,' said Jeff Anderson, head of the executive committee of the North American Association of State and Provincial Lotteries. Maybe somebody can't afford two tickets to the movies, but they can afford $2 in scratch-offs. We still have freedom in the United States.