An Analysis of Selected Determinants of Texas Lottery Revenue
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State lotteries have been implemented in a majority of the United States. The anti-tax sentiment throughout the country has contributed to the approval and growth of this alternative method of revenue generation. In Texas, over $2 1 billion in sales has been produced since the lottery began operating in 1992. Generally, this source of revenue has not been a stable or predictable one. Through the examination of certain influences on lottery revenues, officials can gain insight on ways to increase sales and maximize revenue if they so desire. In this study, multiple regression analysis is employed to evaluate the impact of four selected determinants on Texas lottery revenues. The four determinants analyzed in this study are the lottery payout rate, advertising expenditures, number of jackpots of $25 million or more and the state unemployment rate. Of these four, the unemployment rate was found to have a significant impact on lottery revenues. Since the unemployment rate is a factor outside the control of lottery officials, the remaining three were also analyzed. Of the remaining three determinants, advertising expenditures were found to have a significant impact on lottery revenues.