Marketing on a Budget
By Patricia McQueen
Published October 20, 2026
The importance of marketing cannot be understated. It’s not just about growing sales – it’s about spreading awareness and reaching new customers that will help achieve that goal. In most jurisdictions, lotteries are competing for entertainment dollars with other gaming activities, primarily sports betting and casinos. Those operators have very deep pockets and aren’t afraid to reach into them for advertising. It’s safe to say that competitors in the gaming and entertainment space spend more than lotteries ever will. A lot more.
It’s impossible to compare advertising or marketing budgets from lottery to lottery, even if lottery size is factored in. The dollar amounts and components of these budgets will vary based on the rules and regulations in a given jurisdiction. So that is not the intent here. Rather, we’re looking at the big picture of how each lottery manages its budget, especially when those budgets are historically small or subject to change at a moment’s notice. And because lotteries exist to raise revenue for good causes, if they come in under budget, it’s often due to their desire to minimize spending in order to maximize return to beneficiaries.
How a lottery’s advertising/marketing budget is set will vary by jurisdiction. It may be determined by a legislative or state budgeting process, or it may be requested by the lottery team for approval by the relevant leadership (for example, a commission or board of directors).
ADVERTISEMENT
When Budgets are Squeezed
Many lotteries have faced the ups and downs of marketing and/or advertising budgets, and they have to get extra creative when budgets are cut. Lotteries that have been through periods of budget cuts, or that are preparing for the possibility, offered strategies on how to cope. “Being nimble is key here,” emphasizes Edie Frakes, Vice President and Chief Brand Officer at the Kentucky Lottery. “Know your priorities and make media and marketing plans that are flexible.”
The Arizona Lottery has not had a marketing budget increase since 2008. The agency continues to communicate the importance of incremental spending to better support its mission and deliver the revenue necessary to support programs that impact Arizonans every day. If the budget is reduced, either in absolute terms or effectively due to rising costs, the Lottery would adjust spending in mass media channels and then determine if spending in that channel still made sense. For example, TV production costs should not be more than 25% of the overall TV buy. Therefore, there comes a point where the barrier to entry is simply too high. If that’s the case, there are secondary campaigns taking place, with smaller media investments supporting them. Granted, these products do not generate high returns, but they do generate positive ROI.
At Loto-Québec, if budgets are reduced, the first priority is to protect the products supported by a full 360-degree campaign. Concentrating investments allows for sufficient reach, frequency and impact, rather than spreading the budget too thinly across several initiatives. For smaller products or promotions, there is more reliance on cost-efficient and owned channels, including point-of-sale visibility, website placements, organic and paid social media, and using existing creative assets adapted to the product.
ADVERTISEMENT
The approach is to maintain a strong presence for priority products while giving smaller products targeted support through lower-cost channels. In most cases, it is preferable to have fewer campaigns with enough investment to make an impact, rather than reducing every media buy to a level where it may no longer deliver meaningful results.
In the event of a budget reduction, the Oklahoma Lottery would not apply cuts evenly across every program. Rather, the team would evaluate each investment against current priorities and its ability to influence core business goals. The objective would be to concentrate resources where they can have the greatest impact, even if that means running fewer initiatives. “We would rather fully support the highest-value opportunities than preserve every program at a level too small to be effective,” says Abby Morgan, Director of Marketing and Product Development.
Few lotteries have faced the severe advertising budget cuts as the Texas Lottery over the past decade. The current budget at the nation’s third-largest lottery is just $10 million, down 69% from its level 10 years ago. Following the most recent legislative budget reduction in 2024, all design and creative production functions were moved in-house, allowing the available advertising budget to be allocated primarily toward media.
As the advertising budget has decreased, higher-cost media channels, such as broadcast television and radio, have been eliminated. Streaming video, audio and social media provide statewide coverage. The number of scratch ticket campaigns has also been reduced from five to four annually. Draw game campaigns are now limited to new game launches. In addition, the quantity of jackpot billboards throughout the state has been strategically reduced to maximize the impact of available media dollars.
The Wyoming Lottery (WyoLotto), one of the nation’s smallest lotteries and one of just two without instant games, has to be very cognizant of finances. “When revenues are impacted by prolonged periods of lower jackpots or shifts in consumer discretionary spending, we may adjust marketing expenditures to remain fiscally responsible,” explains Chief Operations Officer Robin Medina.
When faced with budget reductions, the team evaluates the performance and potential impact of each product, campaign and promotional strategy and prioritize those that provide the strongest return on investment and greatest opportunity to drive incremental revenue.
“Rather than reducing every campaign to a smaller media buy, we generally prefer to maintain sufficient investment behind fewer, higher-priority initiatives. Spreading the budget too thin can reduce statewide reach and frequency to a level where a campaign is no longer effective. In those situations, we would rather concentrate our resources where we can achieve meaningful awareness and measurable impact, while reducing, postponing or eliminating lower-priority initiatives.”
ADVERTISEMENT
The Rare Increase
While advertising/marketing budget reductions, or simply keeping the status quo, are most common, on occasion lotteries have been able to convince stakeholders of the need for an increase. Sometimes, especially for smaller lotteries, a budget increase may be possible when changes are coming.
In 2022, WyoLotto’s addition of Keno helped mitigate its dependence on the big jackpot games. “Our most significant increases in marketing and advertising budgets are typically associated with new product launches or major game changes, including changes to multistate games that require additional player education and market awareness,” explains Medina.
And sometimes those who hold the purse strings can be convinced that market conditions warrant budget increases.
While the Oklahoma Lottery prepares for reductions, as noted earlier, it was able to secure a meaningful increase in its marketing budget (set annually by the agency’s budget approval process) for the current fiscal year, driven by two factors. First was the need to support the launch of a new app and website and to realize the full value of its CRM investment. “Those platforms can only deliver results if players know about them, adopt them and continue using them," says Morgan. Second, media and production costs have increased across the board. Maintaining a flat budget would have effectively reduced purchasing power. “The increase has allowed us to support the app and website launch with a comprehensive paid media campaign instead of a limited rollout. It has also enabled us to build retention and engagement campaigns around the CRM, rather than focusing exclusively on player acquisition.”
Like a number of lotteries, the Oregon Lottery has gone both ways. After drastically reducing media and marketing spend in FY20 and FY21 in response to the pandemic, the Lottery maintained a reduced budget for the past several years while right sizing its media footprint. “Through research and studying our audience trends, we found that we could be more efficient in our spend and maintain positive engagement and favorability by shifting our focus to agile digital and social media campaigns,” explains Digital Marketing Supervisor Andrea Valdez. “We also limited costlier broadcast-centric campaigns to a few key moments throughout the year, such as with our annual Holiday Scratch-it campaign. In FY27, we are increasing our spend incrementally to evolve with our audiences and organizational strategy to increase product communication visibility in an increasingly crowded media landscape.”
In Pennsylvania, the Lottery’s advertising budget was flat for six straight fiscal years (FY19 to FY24), even as the competitive gaming market grew rapidly. In FY25, that advertising budget was increased by $4 million to help address media inflation and the need to stay relevant and competitive in the market.
About two years ago, the Virginia Lottery increased its paid advertising budget due to significant evidence showing the rising costs of purchasing media in a competitive environment. Its budget is set annually based on anticipated campaigns and projects, in conjunction with the finance team. By law, the Lottery can spend up to 10% of total sales for operating expenses, and typically comes in about half that, so a small increase in the paid advertising budget was possible.
ADVERTISEMENT
Educating Stakeholders
To help keep stakeholders informed about the need for advertising in an increasingly crowded gaming and entertainment world, as costs keep rising, a number of lotteries offered a few insights about the key performance indicators they use for evaluating their advertising efforts. They may be helpful either for internal optimization or to present a case during their annual budget-setting process, or both.
The Arizona Lottery has an ROI dashboard and reviews campaign results with the Arizona Lottery Commission on a quarterly basis. These are public meetings where the team can fully explain the Lottery’s impact in a clear and concise manner – demonstrating all the key facets of a campaign to share what worked and sometimes what did not work. Post-mortem campaign and planning meetings ensure that the Lottery team learns from results to optimize future marketing investments.
Educating stakeholders is a continuous process, noted Colorado Lottery Advertising Manager Lauren Back. KPI’s will vary by campaign, but the priority is measuring the sales impact of advertising efforts.
“We need ‘vanity metrics’ to monitor our progress daily with such a fractured landscape,” explains Frakes at the Kentucky Lottery. “We know that this is only part of the information we need given that stakeholders can muffle all the noise that click-throughs, engagements, delivered impressions and ROAS might make. At the heart of it, leaders want to know that their brand is healthy.” It’s important for the Lottery to constantly review to ensure that it’s delivering a high return on investment while reaching new customers, retaining the familiar ones and growing lottery sales. To help with that is the Research Department’s Annual Tracking Study to monitor awareness and likeability of ads. Additionally, the team is working towards a MER score – a media effectiveness ratio to measure effectiveness across the spectrum of work. Customer acquisition cost and lifetime value are important to measure because of iLottery. “These metrics can be more involved and complex in the anonymity of the retail transaction. Understanding all these complexities has led us to consider the implementation of loyalty program that can capture online and retail purchases.”
ADVERTISEMENT
For Loto-Québec, the most important KPIs depend on the campaign objective, but generally include reach within the target audience, click-through rate, cost per click, engagement rate and video completion rate when awareness or consideration is the primary objective, and overall sales lift.
The New Mexico Lottery conducts an annual survey through its players’ club, the Promo Zone, to measure advertising efforts. This also provides an opportunity to assess the types of media players are viewing/listening to, so that the Lottery team can address market changes in next year’s media buys.
At the Oklahoma Lottery, advertising investment is connected directly to the business priorities stakeholders already care about, and campaign results show how marketing is contributing to those goals. The most important KPIs vary by campaign objective and season, so success is defined based on the specific behavior each campaign is intended to drive. Ticket sales remain a consistent top-line measure across campaigns, but also considered are measures such as reach, engagement and response, depending on the campaign. With Oklahoma’s new app and website, launched on September 2, the immediate priorities include Players Club reconnections, migration to the new app experience, ongoing app usage, and continued Players Club engagement as the new points system rolls out.
The Oregon Lottery addressed the importance of educating its retail stakeholders about their own advertising. Retailers are encouraged to advertise Lottery products and promotions using the Advertising Lottery: Retailer Best Practices guide and taking advantage of the support offered through their account manager. This guide helps retailers understand the importance of protecting the Oregon Lottery brand, supporting safer play, and building trust with customers. Retailers can access these resources on the Lottery’s website and through leave-behind materials provided by account managers. The guide includes recommendations for advertising placement, messaging, and compliance with Oregon Lottery standards.
Account managers reinforce these best practices through regular retailer visits, coaching, and consultation. In addition, the Lottery’s communications and marketing teams provide approved graphics, messaging guidance, and advertising approvals on a case-by-case basis.
“When educating retailers about advertising, we are careful not to suggest that advertising alone will increase sales,” emphasizes Beth Lloyd, the Lottery's Retailer Communications Manager. “Instead, we explain that effective advertising can help increase product awareness, customer engagement, and purchase consideration, which may positively influence sales. Our goal is to provide retailers with the tools, resources, and guidance they need to promote Lottery products responsibly and effectively.”
The Pennsylvania Lottery tries to put the advertising budget in perspective as a percentage of total ticket sales and where it ranks amongst U.S. lotteries. Return on advertising spend is also an important KPI. In fiscal year 2023-24, the Lottery commissioned an advertising ROI analysis with an independent third party, Nielsen.
For the Texas Lottery, advertising is used to generate awareness of adult Texans 18+. Impressions are the primary KPI.
The Virginia Lottery uses tracking studies and post-campaign results to highlight the performance of broad campaigns. For iLottery-focused campaigns, advertising can be directly connected to player behavior using last-touch attribution modeling.
Stakeholders in Wyoming are educated by connecting WyoLotto’s advertising investment to measurable business outcomes and clearly defining what each campaign is intended to accomplish. Sales revenue and incremental sales lift are key KPIs, particularly for product-specific campaigns and promotions. Also measured are broader indicators such as awareness of the Lottery, awareness of individual games, player engagement, and campaign reach. Because not every advertising initiative is designed to generate an immediate sale, it’s important to look at both short-term performance and longer-term brand and product awareness. This allows the team to demonstrate how advertising supports sales while also keeping WyoLotto and its game portfolio relevant and top of mind with Wyoming players.
ADVERTISEMENT
So Much Creativity
At their heart, lotteries exist to raise revenue for good causes. Whether or not they face mandated budget cuts, they want to raise as much revenue as possible, and keeping expenses low is a big part of that. At the same time, of course, they need to reach new players – and that means marketing. Based on individual circumstances, some have to work harder to get the most bang for the buck, but this is where the industry shines.
In the accompanying article in this month’s marketing series, lotteries offer tips on how to manage expenses, whether reductions are mandated or not. As you browse Money-Saving Marketing Strategies, you’ll find that many lotteries have moved added production capabilities to an in-house team, saving considerably on agency and other fees despite the added cost of human resources. They are also getting multiple uses out of single shoots, and even venturing into AI.
Perhaps you can find your next big money-saving idea!
