Monday, October 29, 2001

Lottery built on dreams of the poor

Paper: Low-income bettors cling to long odds

The Associated Press

        INDIANAPOLIS — Indiana's working poor — those who can least afford nonessential expenses — shell out about six times more money on lottery games than better-off residents, the Indianapolis Star found.

        The Star analyzed lottery sales from 1999 and 2000 at nearly 5,200 retail outlets across the state, comparing sales at stores in lower-income and well-to-do neighborhoods.

        It found that about 11 percent of all lottery revenue generated in Indiana during that period came from the poorest neighborhoods — those where the median mortgage is $40,000 or less.

        In contrast, about 5 percent of the revenue came from its wealthiest neighborhoods, the newspaper reported Sunday.

        The Star's findings mirror those of a 1999 University of Chicago nationwide survey of gambling behavior — that people in lower-income households spent a greater portion of their income on lotteries.

        Richard McGowan, a Boston College professor who has researched the history of state lotteries and legalized gambling, said lotteries amount to a tax paid in disproportionate amounts by the poor.

        “For poor people, it's an instant tax, and a god-awful bet. It's a bigger ripoff for the poor,” he said.

        The odds of winning big are long: 1-in-80 million for Powerball or 1-in-376,992 to win the top $50,000 prize in the daily Lucky Five game, for example. That means players have a better chance of being killed falling out of bed than winning the Powerball or dying in a plane crash than scoring big on Lucky Five.

        Despite those odds, Hoosiers spent about $681 million on lottery games in 1999 and $582 million in 2000.

        At the Laundry Basket, a convenience store on Indianapolis' near east side — where the median mortgage is $38,000 — sales are typically brisk.

        Edna Hopkins, 62, who lives in the neighborhood, spends $30 to $50 of her monthly Social Security check on scratch-off tickets, hoping for a chance to win up to $10,000.

        Ms. Hopkins, who cleaned motel rooms before retiring recently, goes to the Laundry Basket at least once a week to buy Crossword tickets, her favorite scratch-off game.

        She rejects suggestions that she should invest her money instead.

        “Personally, nowadays, I would seriously be afraid to put money in stocks,” Ms. Hopkins said. “I think a lot of people just stick to their dreams. We all have that. That dream that your luck's gonna change.”

        Over the past two years, the Laundry Basket has raked in nearly $2.1 million in lottery revenue — money that comes mainly from daily visits by retirees and working-class customers such as assemblers, construction workers and clerks who live in the area.

        Hoosier Lottery Director John Ross dismisses the notion that the games amount to a voluntary tax on low-income people.

        “I think it's being rather judgmental to say that poor folks are being exploited,” he said. “They make their own decisions on entertainment, voluntarily.”

        State Sen. Lawrence Borst, who sponsored the bill that created Indiana's lottery in 1989, argues that the lottery is just entertainment.

        “It's all disposable income,” said Mr. Borst, R-Greenwood. “Some people can't afford tickets to a Pacers game or a Colts game, but they can afford a couple bucks for a lottery ticket. And they get enjoyment out of it.”

        Two Marion County neighborhoods — each with eight lottery retailers — illustrate the dramatic difference in how the poorest and wealthiest of residents spend money on lottery games.

        In a five-square-mile area on Indianapolis' near east side, the eight retailers took in more than $4.9 million in lottery revenue in 1999-2000.

        That means each household spent about $110 per $10,000 of estimated mortgage wealth on the lottery, according to the Star's analysis.


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