Lottery's lure lost
Gambling in general, once largely recession proof, is down. Risk ignorance is now too risky.
All bets are off for the gambling industry. As rising joblessness forces Americans to wager less, revenues for state lotteries and casinos are dropping. The decline defies the old notion that gambling is recession proof – or an easy ticket to riches and cheap entertainment.
Now, if only this fading delusion of a "lady luck" could be turned into a lasting desire to make an honest buck.
For an industry that doesn't create wealth but simply transfers it – mostly from the poor to the already rich – the future is not rosy. More people are now acutely aware of financial risks from subprime mortgages to shaky stocks to lottery scratch tickets.
State governments are scrambling to make up for an average 2 percent dip in lottery revenues in the third quarter compared with the previous year. Companies that run casinos saw their stock prices drop by more than 60 percent in 2008, while on the Las Vegas Strip, gambling revenues have fallen nearly 10 percent.
Nevada, in fact, faces a sobering moment about the risk of risk. Not only is its gaming industry suffering, but the state has the highest rate of home foreclosures. It seems the gambling mentality extended to buying homes, on the assumption that prices would always go up. That belief – nationwide – is now as dubious as the pull of a slot machine.
This drop in gambling is unusual considering that the Great Depression saw a gambling boom.
In 2007, the legal side of the industry earned $94 billion in revenues, up 70 percent in a decade. That figure doesn't include wagering outside the law, such as bets on the Super Bowl – estimated at $8 billion – or the estimated $2.5 billion gambled away during college basketball's March Madness.