Longitudinal Evidence of the Changing Socio‐Economic Profile of a State Lottery Market

Abstract

This longitudinal study of Indiana lottery expenditures tracks that market from a time when all play was in games offered by other states until the state offered a full portfolio of games. Both the socio‐economic characteristics of players and the nature of their play have changed. Participation doubled when the Indiana games began, and it continues to increase, albeit more slowly. Lottery play is regressive, and has become increasingly regressive over time. An increasing proportion of lottery revenues comes from low‐income players and heavy bettors, although small bets are still the norm. While college graduates play the lottery less than do other individuals, the initial large gap in play rates for these two groups is diminishing as college graduates increase their participation in the lottery. Similarly, women and individuals between the ages of 44 and 65 are continuing to increase their participation in lotteries. Patterns associated with increased regressivity, with increased play among low‐income players, and with higher reliance on heavy bettors, suggest a need for special policy vigilance as the games mature.