Research by Professor Ian Walker an Economist at the University of Warwick shows that lottery ticket sales are not influenced in anyway by the fact that the lottery supports “good causes” or the nature of those good causes. The dream of winning large sums of money is the only real driver of ticket sales.
Good causes are now a major part of the sales promotion for the National Lottery. The Lottery’s TV advertising and 10th birthday celebrations focus strongly on the people and facilities that have been lottery funded. Indeed it has been argued that lottery sales are affected by the public’s perception of the good causes funded. For example it was argued that part of the reason for the decline in sales in mid 2002 was due to controversy over an award to a body concerned with asylum seekers.
However Professor Walkers’s research shows otherwise: The figure below shows the history of sales before, during (right in the middle of the graph) and after that controversy for the five main games. He says “You don’t need to be a trained statistician to see the effects of rollovers in the lotto games and that there is a slight decline in sales for lotto over the period. But Thunderball is rock steady at £5m each Saturday. There is a blip in scratchcard sales – but this is somewhat later that the controversy. So - no support here that bad causes matter for sales.”
A similar argument was made over the Sydney Olympics. British success was thought to have created a warm glow towards the lottery and sales were thought to have lifted. The figure above shows the six months of sale history around the Sydney Olympics.
Again Thunderball is fairly steady at close to £5m per Saturday. Scratchcards are wobbling around £11m. Wednesday Lotto was suffering from a rollover famine before, during and after and so was (almost) flat. All that happened was a rollover in the Saturday game when the games opened and two rollovers as they closed. No of evidence here then that a good good cause mattered for sales.
US data provides us with several “experiments” that reveal that people are sceptical about the value of good causes. The most compelling evidence comes from cross state comparisons of sales according to how the money is spent. There are more than 30 states that run lotteries. In about one third of states the money goes straight to the state government to be mixed with regular tax dollars. In about one third of states all of the surplus is spent on a single good cause – education. And in about 5 states the money goes on a mix of causes that look similar to the UK mix. In 2003, annual lottery sales per capita were about $226 in those states that used the money like tax, $163 for those that spent it on education, and $114 in those states that look close to the UK spending pattern.
Its hard to resist the conclusion that people are not motivated to play by the consolation that they lose to good causes.. That is not to say that the causes supported are not worthy. On the contrary, we could retain the idea that citizens and organisations could apply for funding for their ideas - similar to the government’s Sure Start programme -but using taxpayers’ cash. It would have the further advantage that the spending could be subject to normal public spending scrutiny – reducing the prospect of further white elephants and so leaving more cash for genuinely good ideas.
So does this mean that we don’t need a lottery? Not at all - unless there are important adverse social consequences the fact that people want to part with their pounds to buy those dreams suggests that they do in fact feel better off for being able to do so. In fact if we can drop the baggage of the 28% good causes levy then the dream can be made all the more attractive.
For further information contact:
Professor Ian Walker, University of Warwick
Tel: 024 76 523054 mobile: 07785-538218 email@example.com
Peter Dunn, Press and Media Relations Manager
University of Warwick Tel: 024 76 523708
PR143 PJD 27th October 2004