This article was originally posted at: http://smartblogs.com/leadership/2013/05/27/whos-got-lottery-fever/.
Last week’s Powerball jackpot hit a record $590.5 million, setting off a contagious wave of lottery fever. A single player from Zephyrhills, Fla., holds the winning ticket for this record jackpot. Americans dream of winning big money, so they can provide for their families, buy a tropical island, zoom around in fancy sports cars, live in their dream house and retire. As they say, if you don’t play, you can’t win.
Although most Americans might play the lottery occasionally, many play only when jackpots are big. A large group plays much more regularly. Amounts spent on lottery tickets range from a couple of dollars to hundreds of dollars. Who are the people who play? Where do they live? How much do they spend?
All types of people play the lottery. Who spends the most on lottery tickets? Where do they live?
People who spend the most on lottery tickets and parimutuel betting in the U.S. live along the Eastern Seaboard, in parts of Wyoming and Montana, and in a few places in the West. ZIP codes with residents who spend the most annually, on average, to play the lottery are 07078 (Short Hills, N.J.), 22066 (Great Falls, Va.), 60022 (Glencoe, Ill.) and 94027 (Atherton, Calif.). Residents in these ZIP codes spend, on average, at least $175 annually on lottery tickets.
The commonality among these ZIP codes is the high median household income. Therefore, while these residents may spend the most, it is a small percentage — just 0.12% or less of the median household income. Residents that spend the highest percentage of their median household income on the lottery are located primarily in the Midwest and parts of the South and West. Residents of ZIP codes such as 14604 (Rochester, N.Y.), 38774 (Shelby, Miss.), 77010 (Houston) and 98104 (Seattle) spend, on average, as much as 0.25% of their income on lotteries.
What type of American spends the highest amount on lottery tickets and what type spends the highest percentage of their income playing the lottery? Esri, a geographic information systems company, developed the Tapestry™ Segmentation system that classifies U.S. residential neighborhoods into 65 unique market segments based on socioeconomic and demographic characteristics.
Residents of Connoisseurs, Suburban Splendor and Top Rung neighborhoods spend the most to play the lottery each year. Residents of all of these Tapestry segments are wealthy. On average, residents of those neighborhoods spend $100 or more a year to play the lottery.
Connoisseurs neighborhood residents are well-educated and somewhat older with a median age of 47.7 years. Their neighborhoods are older, affluent, established and slow-growing. The median household income is $123,663. Suburban Splendor residents live in growing affluent neighborhoods. Most households are two-income, married couple families. The median household income is $116,617 and the median age is 43.4 years. Top Rung residents represent the wealthiest 1% of U.S. households. The median household income is $173,172 and the median age is 45 years. Residents are highly-educated, married couples with and without children.
Residents in High Rise Renters and Social Security Set neighborhoods spend the highest percentage of their income on lottery tickets. High Rise Renters neighborhoods are culturally diverse urban communities in densely populated areas, such as New York City. Most residents are either single or single parents. The median age is 31.9 years and the median household income is $22,758. Social Security Set neighborhoods are located among business districts and around city parks in large U.S. cities. Most residents live alone in rented apartments in low-rent, high-rise buildings. The median age is 44.4 years and the median household income is $16,332.
Although most Americans who play the lottery each year will often wait until there is a big jackpot, others are fanatics and will play at least eight times or more a month. Who are these lottery fanatics? Where do they live?
Frequent lottery players are most likely to live in the Midwest, areas of the West and in Alaska. ZIP codes with residents most likely to play the lottery eight or more times per month are 02126 (Mattapan, Mass.), 11433 (Jamaica, N.Y.), 48125 (Dearborn Heights, Mich.) and 60624 (Chicago).
What type of consumer is most likely to play the lottery frequently? Who is the least likely?
City Strivers residents are 1.5 times more likely than the average American to play the lottery at least eight times per month. Residents of City Strivers neighborhoods are a mix of family types living in densely populated areas of major cities such as New York and Chicago. The median age is 33.8 years and the median household income is $36,621. Half of the employed residents work in the health care sector of the service industry. Twenty-two percent hold government jobs.
Residents of Connoisseurs, NeWest Residents and Top Rung are the least likely to play the lottery at least eight times per month. Connoisseurs residents are well-educated and somewhat older with a median age of 47.7 years. Their neighborhoods are older, affluent, established and slow-growing. The median household income is $123,663. NeWest Residents neighborhoods are dominated by Hispanic residents with a strong family-oriented lifestyle. They rent apartment in mid- or high-rise buildings. The median age is 27.4 years and the median household income is $25,284. Top Rung residents represent the wealthiest 1% of U.S. households. The median household income is $173,172 and the median age is 45 years. Residents are highly-educated, married couples with and without children.
Why this matters
Because everyone dreams of “winning big,” lottery players come from all walks of life and live all over the U.S. It is critical that lottery organizations understand the differences between the types of people who play frequently and those who play occasionally. Although wealthy people tend to spend more on lottery tickets, they do not play regularly. Conversely, those with lower incomes tend to play more frequently. By understanding players’ demographics and lifestyles and where they live, lottery organizations can market their games more effectively. Targeting different consumer groups with specific messaging and promotions can help to grow their revenue. Lottery organizations can also use this consumer knowledge to identify the best locations to sell lottery tickets and where to expand.
Pam Allison is a digital media, marketing strategist and location intelligence consultant. You can visit her blog at www.pamallison.com.