Are Lottery Promotions Profitable?

Most of us have seen and even participated in raffle giveaway promotions. They’re a powerful way to engage with your audience. But are they profitable?

Lotteries generate a substantial share of state revenue, and states use that money to do all kinds of good things. They put some of it toward education, and others help to address gambling addiction or to fund other services. But they also use some of it to promote the notion that lottery winnings are a civic duty and that people can feel good about their purchase — despite the fact that, on average, most people lose.

In Cohen’s telling, this new argument arose when awareness of the enormous sums that could be won in the lottery collided with a crisis in state funding. In the nineteen-sixties, with an ever-expanding population and the lingering effects of the Vietnam War, state budgets began to buckle, and it became difficult to balance them without raising taxes or cutting services — both of which were deeply unpopular among voters.

So lottery advocates began arguing that, since people were going to gamble anyway, governments should at least pocket the profits. It was a reasonable argument, albeit one with some limits. After all, if governments were to sell heroin, that would also make them profitable, and yet we don’t have a national conversation about whether it is ethical for states to do so. But the argument did succeed in shifting public attitudes about lotteries, and today’s games are almost always profitable.