Targeting the Poor
Lotteries cost more than states bargain for, while falling short of promises made.
Articles within this series
Many regard lotteries as a relatively benign form of gambling. However, 31% of callers to the 1-800-GAMBLER national hotline (operated by the Council on Compulsive Gambling of New Jersey) indicate otherwise.1 According to the North American Association of State and Provincial Lotteries, state-run lotteries combined are a $42 billion per year business (or tax revenue) for state governments in 2002. Unfortunately, the majority of lotteries fall short of promises made, and the social costs often are greater than citizens realize.
Poor
Lotteries place a disproportionate tax burden on the poor. Examples abound:
- The 32 Colorado counties with the highest per-capita lottery sales all have per-capita income levels below the state average.2
- In New York, a Newsday study showed that those living in the most impoverished areas of the state spent eight times more of their income on lottery tickets than did those living in the most affluent sections.3
- The three poorest counties in New Mexico all rank among the state’s top 10 counties in per-capita lottery sales. New Mexico’s wealthiest county accounts for the fewest lottery ticket purchases per resident.4
- An Associated Press survey of Wisconsin lottery purchases found that residents living in the poorest neighborhoods in the state spent, on average, four times as much of their income on lottery tickets as did those in wealthier neighborhoods.5
- A University of Louisville study showed that Kentuckians with annual incomes less than $15,000 spent $9.23 per week on lottery tickets, while those earning above $35,000 spent only $7.36.6
- A Texas A&M study found that the lowest-income group of Texans, who earn only 2% of the state’s total income, provide 10% of the lottery’s revenue.7 Studies show that lottery play is more common among blacks and Hispanics than white, among laborers and service workers than advanced professionals, and among those without a high school degree than college graduates.8
Recruitment
Clotfelter and Cook “conclude with considerable confidence that the lottery is a powerful recruiting device, which in 1974 was responsible for inducing about one-quarter of the adult population who would not otherwise have done so to participate in commercial gambling.”9
By making lottery opportunities more available (increasing the number of retailers and VLT's) and accessible (placing machines in grocery stores, convenience outlets and high-traffic locations), the speed and instant gratification of scratch tickets and VLT's further serve to increase addiction.
Targeting the Poor
Many lotteries aggressively market to the poor. Following is an excerpt from an advertising plan for the Ohio SuperLotto game: “We recommend that promotional ‘pushes’ be targeted as early as possible in the month. Government benefits, payroll and Social Security payments are released on the first Tuesday of each calendar month. This, in effect, creates millions of additional, non-taxable dollars in the local economies of which the majority is disposable.”10
Some lottery advertisements are overt in their solicitation of the poor. Perhaps the most infamous example is the Illinois lottery advertisement in an impoverished Chicago neighborhood, which read: “This could be your ticket out.”11 Another advertising campaign in the 1980s by the Illinois lottery consisted of 40 billboards reading: “How to Get from Washington Boulevard to Easy Street.” Washington Boulevard, and other streets mentioned in these ads, are located in a very depressed westside Chicago neighborhood.12
In many states, such as Florida, lottery outlets are actually more concentrated in impoverished neighborhoods than wealthy ones.13