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State lotteries transfer wealth out of needy communities, study finds

Posted at 3:14 PM, Jul 11, 2022

Lottery retailers in nearly every state are clustered in lower-income neighborhoods, driving a wealth transfer from less affluent and educated Americans to the multinational corporations that are increasingly managing the day-to-day operations of the state-sanctioned gambling games.

A new investigation from the Howard Center for Investigative Journalism at the University of Maryland found that, in almost every state, lottery retailers are concentrated in lower-income neighborhoods that are disproportionately Black and Hispanic. The investigation also used, for the first time, mobile phone data to show that lottery retail store customers are mostly local. The center also found few checks on aggressive advertising and marketing of the games.

“Poor people are collateral damage to a cause of raising money for what the legislators feel is good purposes … public safety, local schools,” said Gregory W. Sullivan, a former Massachusetts inspector general and now research director for a free-market think tank in Boston.

The investigation found that the main promise of lotteries across the United States, which says that they support education, doesn’t quite hold up. Lotteries often compound inequities by disproportionately benefiting college students and wealthier school districts far from the neighborhoods where most tickets are sold.

A 1999 report for the National Gambling Impact Study Commission found the top 10% of lottery spenders accounted for two-thirds of sales. The study found that the most frequent players had lower incomes, were high school dropouts and were disproportionately Black.

This story was originally published by the Associated Press and the Howard Center for Investigative Journalism.