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Here's why Americans spend nearly 4 times more money gambling at casinos than in the lottery

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December 18, 2023
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Here's why Americans spend nearly 4 times more money gambling at casinos than in the lottery

Americans are spending hundreds of billions of dollars every year gambling—online, in person, and on lottery tickets.

About three years after the worst of the COVID-19 pandemic, the spending growth for casino gambling continues to outpace the rise in lottery ticket buying. Casino gambling wins a lopsided amount of players' money: $417 billion in the first three quarters of 2023. That's more than triple the $117 billion spent on lotteries during the same time, according to Bureau of Economic Analysis spending data.

Some top reasons why people spend so much more on casino gambling are evident in data from an American Gaming Association tracker that projects commercial gaming revenues will break records for the third year in a row.

People are getting out to casinos to bet more money alongside other gamblers on slot machines, poker, and other games. What's more, sports fans have embraced betting outlets promoted in inescapable TV ads featuring big-name actors and athletes. Spending on sports betting continued to grow at a record-breaking pace in 2023 as more states legalized it after the U.S. Supreme Court struck down a ban in 2018. By late 2023, people could bet on sports online and/or at retail locations in about three-quarters of all states. Internet gaming also took off in 2023 in the states where the practice is legal.

Part of the overall growth is attributable to the rise in these new forms of gambling, including casino-operated mobile gambling applications and lottery-based electronic skill games that resemble slot machines. Altogether, these trends hint at deeper insights into what drives gambling behaviors, and casino gaming and the lottery have different qualities that help explain why playing the lotto doesn't capture nearly as much of gamblers' money.

ATS.io used Bureau of Economic Analysis spending data to capture the differences in gambling patterns among American casino-goers and lottery participants.

A line chart showing the growing difference between casino gambling spending and lottery spending over time.
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Casino spending grows faster than lottery spending

High inflation in recent years through 2023 hasn't stopped two decades of fairly steady growth in spending on lottery and casino gambling, except for a sharp dip for casinos at the height of the pandemic restrictions. But casino gambling spending growth is more robust. American spending on gambling at casinos has grown 61% since 2000—adjusted for inflation—compared to 42% growth in lottery spending.

The fact that Americans favor casino gaming over the lottery when it comes to their gambling habits may not be surprising considering that casinos typically offer a higher return to player, otherwise known as RTP. States that allow lotteries pay out an average of about 65% of gross revenue in prize money, while returns of 80% to 90% or more are not unusual for casino games.

The odds of winning casino games vary so much that it is difficult to make a comparison with the chances of winning the lottery—about 1 in 302.6 million for the Mega Millions' top prize, for instance. However, the chances of winning the jackpot on the popular Megabucks slot machines, which often make the news when they periodically create new millionaires, are oft-discussed in gaming circles, with estimates as high as 1 in 50 million.

Gambling gains come as Americans' attitudes have shifted, with a record of nearly 70% deeming it a "morally acceptable" activity in a 2018 Gallup poll. However, underlying factors that are less obvious may contribute to higher spending on casino gambling.

Casinos are meticulously designed to keep people playing, with maximum comfort for guests and clear views of other games to make their way to next. Of course, the incentive of receiving free drinks helps keep some people betting. There's also some indication among gambling researchers that game machine lights and celebratory sounds, along with newer technologies such as surround sound and small vibrations to the player's chair, draw people into an immersive world that could distract them from risky behavior.

What's more, compared with the lottery where a player may be more likely to buy a set number of Powerball or scratch-off tickets and be done until the next attempt at a big jackpot, online betting platforms are easily accessible, engross players, and make spending more money simple.

Whether on a Las Vegas gaming floor or through a smartphone, placing a casino bet can also give players a sense of control, requiring their input, rather than leaving the outcome up to the luck of the lottery draw.

Story editing by Rose Shilling and Ashleigh Graf. Copy editing by Tim Bruns.

This story originally appeared on ATS.io and was produced and distributed in partnership with Stacker Studio.

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