One lucky person in Chicago won the Mega Million Jackpot of more than $1.337 billion, a historically high figure for a U.S. lottery, but indicative of a broader phenomenon than just a bunch of Americans feeling lucky. According to the Mega Million lottery company, the winning ticket for the billion-dollar amount was purchased at a gas station.
The billion-dollar jackpot generated more than $706 million in lottery ticket sales nationwide. By comparison, the $20 million Mega Million Jackpot played in April only raised $15 million in sales. Several states across the nation are reporting million-dollar revenues on the back of increased lottery ticket sales.
In Arizona, scratch-off lottery ticket purchases exceeded the state lottery company’s projected sales for July by 152%, generating more than $123.5 million in revenue.
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Lottery ticket sales exceeded expectations in Florida and collected a surplus of more than $370.3 million. The Florida State Lottery had record sales of more than $9.32 billion annually by June 30.
In Virginia, Mega Million lottery sales were such that they raised more than $30 million to support funding for the state’s K-12 schools.
Do rising lottery ticket sales portend an economic downturn?
As lottery ticket sales take off in the U.S., the economy enters a technical recession and inflation continues to eat away at Americans’ savings, but employment remains strong across the country.
Although unemployment in the U.S. does not exceed 3.6% at present, some indicators, such as the increase in jobless claims, have raised an alarm about the state of the economy. On the other hand, consumer sentiment, as measured by the University of Michigan, is at historic lows and has even fallen below its level during the COVID-19 crisis.
In other words, the multi-billion dollar jackpot may have an economic explanation. In a 1994 study, Indiana University professor John L. Mikesell found that when unemployment rises in the United States, lottery sales increase slightly, indicating that the promise of becoming a millionaire just by playing a few numbers becomes more attractive to Americans during hard times.
The 2008 crisis was also a good case study, as shown by the work of Dr. Emily Haisley, who found that as Americans lost jobs and homes to the subprime crisis, lottery sales increased in 29 of the 42 states that own lottery companies. “When people view themselves as doing worse financially, then that motivates them to purchase lottery tickets,” Haisley explained.
However, not all economists agree that lottery sales help anticipate a recession. The current period of low unemployment and high inflation are uncharted waters in the study of lottery ticket sales as an economic indicator. Are Americans desperate to find some hope in a lottery ticket, or are they just feeling lucky?
Economist, writer and liberal. With a focus on finance, the war on drugs, history, and geopolitics // Economista, escritor y liberal. Con enfoque en finanzas, guerra contra las drogas, historia y geopolítica