Lottery Marketing Strategies


Lottery is a form of gambling that rewards lucky participants with prizes based on the drawing of numbers. Lottery games are often run by governments at the local, state, or national level and offer a form of government revenue without directly taxing the general public. In an anti-tax era, this makes the lottery attractive to many politicians who wish to increase state budgets but do not want to raise taxes. The problem is that the lottery promotes gambling, and if it is not well managed can have serious negative consequences for poor people and others who are unable to control their gambling urges.

The lottery industry is a business, and the primary objective of any business is to maximize revenue. To achieve this, the marketing strategy must focus on persuading people to spend their money. This necessarily focuses on particular groups such as convenience store operators (lottery tickets are usually sold in these locations); lottery suppliers (who are heavy contributors to state political campaigns); teachers (in those states in which the lottery’s revenues are earmarked for education); and so on.

But if an individual’s utility from the entertainment value or other non-monetary benefits of playing the lottery exceeds the disutility of a monetary loss, the purchase may be rational for them. Moreover, if the likelihood of winning is sufficiently high, then a person’s utility from the lottery may outweigh their marginal cost of playing. Lottery games are often designed to grow the jackpot to a seemingly newsworthy amount, which encourages play and public interest.