Lottery Advertising: You Be the Judge. Or the Statistician.

Wisconsin state budget bills are usually 1,000 or more pages in length and contain many small items that receive little or no attention.  That is not to say, however, that serious questions cannot arise from the minutiae.

One example from the new 2017-19 budget makes the point.  In the Department of Revenue section of the 632-page “Executive Budget” book is this request:

“The Governor recommends increasing the lottery general program operations appropriation by $3 million in each year to be spent on current and additional informational activities to maintain and increase overall ticket sales.  This will ensure continued property tax relief for Wisconsin homeowners through the lottery and gaming credit.”

At the same time, the Wisconsin state constitution, Art. IV, Sec. 24 (6)(a) reads:

“The expenditure of public funds or of revenues derived from lottery operations to engage in promotional advertising of the Wisconsin state lottery is prohibited.  Any advertising of the state lottery shall indicate the odds of a specific lottery ticket to be selected as the winning ticket for each prize amount offered.”

According to Merriam-Webster, advertising is “the action of calling something to the attention of the public especially by paid announcements”; the definition of promotion is “the act of furthering the growth or development of something.”

How do you reconcile the budget’s $6 million biennial spending request and Article IV, Section 24?

If you’re not legally inclined, consider some statistics.  According to a mid-2016 report from the Legislative Audit Bureau, the Wisconsin lottery spent about $7.5 million on “product information” in each of the prior three fiscal years.  During this same period, growth in lottery sales averaged 0.7%.

In 2003, the lottery spent $4.5 million on product information and generated $96.68 in sales per dollar spent.  In 2008, it increased informational spending to $7.5 million and sales per dollar were $65.96.  Since then, informational spending has remained unchanged and sales per dollar averaged about $70.

Given this abbreviated history, how do you evaluate the relationship between informational expenditures and lottery sales?

This entry was posted in lottery. Bookmark the permalink.

Comments are closed.