In October 2007, the N.H. Lottery Commission made available a $30 scratch ticket called Polar Express. Offering a top prize of $1 million, it is the highest priced instant lottery ticket ever to be sold in the state. The odds of winning the lowest possible prize of $40 are one in six. The odds of winning the $1 million prize, however, are one in 150,000. Good luck.

The $30 ticket represents the latest development in a state and national trend of lottery players requesting higher priced scratch-off tickets with bigger payoffs. It was only a couple of years ago, in fiscal year 2006, that New Hampshire first unveiled a $20 scratch ticket. The state now offers at least five different $20 games and one $30 game, and higher priced tickets could be on the way. Texas began offering a $50 scratch ticket last year, and other states could soon follow suit.

“There’s always a discussion on how we can make better products that appeal to our players,” said Maura McCann, spokesperson for the N.H. Lottery Commission. “We are continually assessing our products to make them more entertaining to our players, more fun for our players to be a part of and that sort of thing.”

Lottery critics contend that Americans with low incomes and limited education tend to spend the most money on scratch tickets. Opponents also argue that higher priced tickets lend themselves to problem gambling and addictive habits typically associated with casinos. 

“This is hammering the poor. We know that,” said Tom Gray, spokesman for the National Coalition Against Legalized Gambling. “Have you ever stopped at a gas station and watched who’s in line where the tickets are sold?”

Gray believes state governments are exploiting desperate people to raise revenue. He is not surprised that New Hampshire and other states are introducing higher priced scratch tickets. “This is people buying false hope. Why not go big?” he said.

Rob Kohler, a former 12-year employee of the Texas Lottery Commission, agrees with Gray. Now a consultant and lobbyist with the Christian Life Commission—the public policy arm of the Baptist General Convention of Texas, which opposes legalized gambling—Kohler feels that high-priced lottery tickets promote irresponsible financial decisions by the nation’s poorest citizens. In Texas, the lottery system does about $60 million in sales each week, and 80 percent of those sales come from scratch tickets, he said.

“Why are folks spending nearly $40 or $50 million a week on scratch tickets? It’s not that they like to scratch the latex. What it is is an impulse purchase with immediate gratification,” Kohler said. “They’ve taken this product and just raised the price of it.”

There has been no concrete discussion so far about the possibility of adding $40 or $50 tickets in New Hampshire, McCann said, but customers are definitely trending toward higher priced scratch tickets. The Lottery Commission gets feedback from both lottery players and retailers who sell scratch tickets. Demand for $20 and $30 tickets has climbed significantly in recent years.

“It’s a natural progression just to keep going with those increased price points,” McCann said.

In fiscal year 2007, which ended on June 30, the N.H. Lottery Commission made just shy of $264 million, up about .5 percent ($1.2 million) from fiscal year 2006. Instant games accounted for 71 percent of total sales, netting $188.6 million—a 6.5 percent ($11.6 million) increase over fiscal year 2006.

Powerball, by contrast, dipped from more than $57 million in fiscal year 2006 to $44.4 million in FY ’07—a 22.4 percent decrease. Megabucks also dropped by more than 5 percent, netting $9.7 million in FY ’07. According to McCann, the success of lotto-style games is unpredictable because they rely entirely on jackpots. The higher the jackpot gets, the more people buy tickets. If winners happen to pop up frequently, the jackpot does not get a chance to build up, and fewer people purchase tickets.

“The other lotto-style games are jackpot driven,” McCann said. “We’re at the mercy of the lotto gods.”

The odds and prizes for instant lottery games, on the other hand, are determined by the state. “Instant games can continually be refreshed. A lot of thought and energy goes into determining what the proper mix is,” McCann said.

In FY ’07, $20 tickets accounted for about 18 percent of New Hampshire’s total instant lottery sales. Ten dollar tickets were the most popular, making up about 23 percent of sales, while $5 tickets made up about 20 percent. The lowest priced $1 tickets made up just 9 percent of total sales, while $2 and $3 tickets combined for about 27 percent.

Since being introduced in October, the $30 Polar Express ticket has already reeled in about $5.2 million, according to McCann. The introduction of the higher priced game has caused a slight dip in sales of $10 and $20 tickets, but McCann expects those games to rebound. Overall, sales of almost every price category have consistently gone up across the board.

“Once the novelty of that $30 price point wears off, then everything kind of comes back to its normal selling patterns,” she said.

In 1963, New Hampshire became the first state in the nation to establish a government-operated lottery system, and 40 other states have since followed suit. New Hampshire is one of at least 10 states that dedicate lottery revenue exclusively to education funding. In the Granite State, about 30 cents of each lottery dollar goes back to the state for education aid. In FY ’07, the lottery system contributed about $79 million toward education funding. Since its inception in the ’60s, the state lottery system has raised more than $1 billion toward education.

In order to offer higher priced scratch tickets, the Lottery Commission must get approval from the state legislature. With education funding currently a hot topic in New Hampshire, politicians could push for $40 or $50 tickets in the near future. Gov. John Lynch pushed for the introduction of $30 tickets last year as a way to raise additional revenue, and Lynch finds himself in a pinch for revenue in 2008.

Opponents of legalized gambling see state lottery systems as an irresponsible tax that disproportionately burdens the poor. Gray does not feel that using more expensive scratch tickets to raise revenue for education funding is an effective or justifiable practice.

“I don’t care how much it’s raised,” he said. “Gambling can’t deliver on its promises and it can’t hide its victims. It’s a failed policy.”

Gray accuses New Hampshire’s government of attempting to push increasingly addictive products on its poorest citizens. Studies in Texas have found that most spending on lottery tickets comes from the state’s poorest districts, he said. Instead of spending money on household products and saving for retirement, people are blowing their money on lottery tickets that have an infinitesimal chance of actually making them rich.

“Government ought to help people make good decisions with their money. In this case, when government gets into pushing the lottery, they’re pushing a product that undercuts a person’s ability to make a sound decision,” Gray said. “It runs counter to what government should be.”

In his position with the Christian Life Commission, Kohler studies census data pertaining to the income brackets, education levels and ethnicities of people who play the lottery in Texas. “What you see predominantly—and the numbers bare it out—is sales come from the folks that live in (areas of) lower income and lower education levels and higher minorities,” Kohler said.

The Scientific Games Corporation, an international marketing and technology company that designs and produces instant lottery tickets, denies claims that poor people spend the most money on lottery tickets. The reason that most sales come from poor districts, according to Scientific Games, is that those districts have more retail outlets that offer lottery tickets. On its Web site, Scientific Games claims that 57 percent of Americans have bought at least one lottery ticket over the last year. The site claims that people of middle or upper incomes ($45,000 to $75,000) are most likely to play, while people with low incomes of $25,000 or less are least likely to play. People with incomes of more than $75,000 spend three times as much on lottery games per month as people with incomes of less than $25,000, according to the site.
The N.H. Lottery Commission conducts occasional demographic surveys to find out who its most regular players are. One such survey was conducted over the Lottery Replay Web site in November. Surprisingly, 59 percent of those who responded to the survey were female and just 41 percent were male.

The survey found that those most likely to play the lottery—42 percent—earned incomes between $30,000 and $59,000 per year. Twenty-nine percent made less than $30,000 per year, while 23 percent made between $60,000 and $100,000 per year. Just 6 percent made more than $100,000 per year.

Most of those surveyed—about 66 percent—were between the ages of 41 and 65, while about 20 percent fell between the ages of 25 and 40.

The education levels of those surveyed were more evenly distributed. About 32 percent had graduated from high school but had not entered college, 33 percent had some college education and 24 percent were college graduates. Only about 4 percent had not graduated from high school, and about 6 percent had post graduate college educations.

Opponents of legalized gambling have been keeping a close eye on New Hampshire. The legislature considered several bills last year that would have allowed the state to establish casinos, although none of them have passed. Supporters say expanded gambling would raise much needed revenue to ease reliance on property taxes for education funding. Opponents argue that casinos would introduce a flood of crime, poverty and gambling problems to the state.

While the legislature seems hesitant to embrace casinos and slot machines in New Hampshire, it has shown a willingness to raise the maximum lottery ticket price. Kohler wonders where state legislators will draw the line. In Texas, he said, $50 scratch tickets are the most expensive items in many convenience stores.

Approximately 1,250 retailers in New Hampshire carry lottery tickets. One of those shops is Cabot Street Market in Portsmouth. According to co-owner Dave Bell, Cabot Street is in the top 5 percent for lottery sales in the state. Bell said the trend toward higher priced scratch tickets has been noticeable.

“The $1 ones don’t sell nearly like the $5s and $10s,” he said. “As they come out with the higher priced ones, they sell.”

The Polar Express ticket is displayed prominently on the market’s front counter. Bell said the $30 tickets have sold well since being unveiled in the fall. Although he personally prefers Megabucks and other jackpot lottery games, Bell has seen a number of people pick winners with the $30 scratch-offs. One customer won $250 on the $30 game, he said.

And, according to Bell, it is possible to win big: The guy who delivers beer to Cabot Street supposedly won the $1 million prize shortly before Christmas.