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This paper estimates the long‐ and short‐run elasticities for Lotto. It is particularly concerned with the dynamic response to price variations since, for some goods, this has sometimes been used to infer the presence of addiction. The price elasticity is identified through variation in the expected value of a Lotto ticket induced by rollovers whose high frequency results in surprisingly high variation in the expected value of holding a ticket. Unit root tests are applied to the series in order to identify their time series properties and to avoid a spurious regression problem. The series are found to be stationary. We apply instrumental variables to account for the endogeneity which arises due to correlation between the expected value and the dependent sales variable. The estimated long‐run elasticity exceeds the short‐run elasticity and this supports the hypothesis that there is an element of addictive behaviour in sales. The …