Feeling lucky? Lottery sales are way down
If you won the Powerball during a global pandemic, would you retreat to a luxurious underground bunker or simply pay the rent?
Fewer people are willing to take that gamble. During the first three weeks of March, lottery sales in Los Angeles County dropped by almost a quarter from the same period a year ago, or around $41 million, according to data from the California State Lottery Commission.
You might be wondering: If fewer people are playing does that improve my chances of winning? Sadly, no. But we’ll get to that later.
What it does signal are lean times ahead for the state budget. During 2018-19 fiscal year, lottery sales for California were nearly $7.4 billion. That resulted in a $1.8 billion contribution to the state’s education budget, according to the California State Lottery Commission. The projected contribution for this year was already down by 11%. Now, that amount will certainly shrink.
The drop in lottery revenue is an early indication of how the state and local budgets will be decimated as traditional sources of funding generated by everything from airport fees to parking tickets dwindle.
The slowing sales of lottery tickets coincided with Gov. Gavin Newsom’s March 3 declaration of a state of emergency over concerns about the spread of the coronavirus. Mayor Eric Garcetti followed less than two weeks later with a “Stay at Home” order that required all non-essential businesses to close in the City of Los Angeles.
“Sales are going down and business is going down,” said Rafel Mia, an assistant manager at a 7-Eleven store in North Hollywood. “We cannot sell Powerball and SuperLotto.”
Khaliq Kagzi, a store manager for the 7-Eleven on Figueroa Street near Downtown, said, “Traffic in our store has dropped 35% for everything, not just Lotto, although it has been down a little bit more.”
Scratchers, which can be bought for as little as one dollar and account for about three quarters of total lottery sales, saw a 17% drop. Kagzi said Scratchers still sell, but added people may be desperate because of the economic uncertainty brought on by coronavirus.
“They just sit down and scratch the tickets,” said Kagzi. “Sometimes the customer will buy the entire pack.”
Ken Alexander, a professor of mathematics at the University of Southern California, said fewer ticket sales do not increase your chances of winning. The odds for the Powerball lottery don’t change no matter how many people play.
“Lower sales do have two effects,” said Alexander. “On the negative side, the prize will be smaller. On the positive side, if you do win, you are less likely to have to share your prize with someone else.”
He added, “Because of fewer ticket sales, at any given drawing the prize will be smaller, but it will also take longer on average before anyone wins, so by the time the prize is actually won, the jackpot size is on average the same as before sales dropped.”
To illustrate the point, Alexander sent a drawing to show how the Powerball jackpot grows in “normal times” (red line) versus growth after a sales drop (green line) along with what an average jackpot won (black line).
Jorge De La Cruz, the assistant deputy director for public affairs of the state lottery, said because of the current health emergency and shelter-in-place order, it’s reasonable Californians are visiting stores less frequently.
How we did it: We examined California Lottery sales data for LA County from Jan. – March 22, 2020 and 2019. This includes sales from Game Name, Daily 3, Daily 4, Daily Derby, Fantasy 5, Hot Spot, Mega Millions, Powerball, Super Lotto Plus and Scratchers games.
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