Zipping up lottery sales: zip codes in the Big Apple get the biggest bite of Empire State lottery sales

American Demographics, April, 1996

Zip codes in the Big Apple get the biggest bite of Empire State lottery sales.

In the 1994 movie, It Could Happen to You, a New York City cop wins the lottery and shares his take with a waitress in lieu of a tip. While the scenario is unlikely, the location is not. Per-capita sales of New York State lottery tickets are highest in and around the Big Apple, according to an American Demographics analysis of 1994 zip-code data provided by the Associated Press.

Charlie Lang, the lottery-winning movie cop, is a good example of the typical lottery participant. Studies have found that men are more likely than women to play, and lower-middle-class people are more likely than the very poor or better-off play. Some research finds that the unemployed are more likely than employed people to buy lottery tickets in hopes of reversing their fortunes.

Despite this downscale profile, the New York State data reveal that the greater the share of employed residents in a zip code, the higher its per-capita lottery sales. Likewise, the greater the share of residents with college degrees, the greater the sales. And zips with a higher-than-average share of affluent households also have higher-than-average lottery sales.

One reason for these counterintuitive findings is that affluent people who play the lottery spend more money on it. "Higher-income households may spend a smaller percentage of their income on lotteries, but it still may be a larger dollar amount," says Auburn University economist Daniel Gropper.

But the biggest reason for the seeming demographic/geographic mismatch between ticket sales and ticket buyers is that people don't buy lottery tickets at home. "Lottery tickets are a convenience kind of good," says Gropper, who has studied state differences in lottery revenues. "There may be a store outside a subway station where people pick up their coffee and lottery tickets. A lot of people buy tickets on their lunch hour near their place of work, too."

Nonresidents certainly explain the top-ranked zip. Manhattan's 10005, Wall Street's zip code, generated 1994 per-capita lottery sales of $38,800. Neighboring zip 10006 ranked third, garnering almost $17,000 in sales per resident. These are commercial districts near the southern tip of the island that have lots of workers and retailers, but very few residents.

Among heavily populated zip codes, New York City boasts many of the highest per-capita lottery sales. Zips 10001 and 10038 are, at $987 and $848 per capita in 1994, respectively. Big Apple satellite cities Tappan (zip 10983) and White Plains (zip 10601) follow with $814 and $683. Average per-capita sales for all New York State zips in 1994 were $257. Most heavily populated zips with high lottery spending per capita are in eastern New York. Those with the lowest sales are distributed throughout the state.

New York, like most states, sponsors two types of lottery games. In "instant" games, players scratch waxy material off tickets to immediately reveal a win or loss. In computer-generated games like "Lotto" and "Numbers," players make online wagers. Computer-generated games appeal to a more upscale group than do instant games. In New York, they also bring in far more money, an average of $192 per person in 1994, versus $64 for instant games.

State lotteries provide business for stores that sell tickets, advertising agencies that do promotions, and companies that print tickets and provide computer equipment. Businesspeople also buy into the games, On average, the greater the share of workers with managerial or sales/ marketing jobs in a zip code, the higher its per-capita lottery sales.