THE MONEY COMES OUT OVER THERE R.Digest 7/2000 Anthony D. Long

I was on vacation, playing the slot machines. It was my first time in a casino, and I wasn’t sure how the machines operated. "Excuse me," I said to a casino employee. "How does this work?"

The worker showed me how to insert a bill, hit the spin button and operate the release handle.

"And where does the money come out?" I asked.

He smiled and motioned to a far wall before saying, "Usually the ATM."

STATISTICS ON THE RUIN OF GAMBLING R.Digest 6/99 p. 148

In 1997 bettors blew a whopping $50.9 billion – roughly 5 times the amount lost in 1980. That’s more than the public spent on movies, theme parks, recorded music and sporting events combined. Of those losses, an estimated 30% pours from problem gamblers.

Compulsive gambling has been linked to child abuse, domestic violence, bankruptcies, welfare fraud and other criminal ills. A survey of 228 members of Gamblers Anonymous found that almost half admitted to insurance fraud, embezzlement or arson. – Matea Gold & David Ferrell from Los Angeles Times

STATISTICS ON GAMBLING Focus On The Family Newsletter 1999

Studies show that about 2/3’s of teens have gambled in the past year.¹ Sometimes they are betting on sports or cards with their friends, but a staggering percentage are gambling on legal activities despite their ages. In Massachusetts, 47% of seventh graders and 3/4s of high school seniors, have played the lottery.² Massachusetts’ attorney general found that 2/3’s of underage teens who tried were able to bet on keno games run by the lottery.³ In a survey of 12,000 Louisiana adolescents, ¼ reported playing video poker, 17 % had gambled on slot machines and 1 in 10 had bet on horse or dog racing.⁴

Last March, our commission (on gambling) traveled to Boston to examine the impact of lotteries. It was the perfect laboratory to study their phenomenal growth. Massachusetts sells more than $5000 worth of lottery tickets each year for every man woman and child in the state!¹⁴

The lottery accounts for 13% of the state’s entire budget.¹⁵

Many states, like Massachusetts now offer lottery games mimicking casino-style gambling. Several of them operate electronic slot machines called video lottery terminals (VLT). They have proven to be very popular and highly addictive. The number of Gamblers Anonymous meetings in Oregon rose from 3 in the state to more than 30 after VLTs were introduced.¹⁷ Researchers in S. Dakota documented a direct correlation between gambling and addiction and VLTs in that state.¹⁸

Another trend is the constant need to increase top prize amounts. Lottery administrators are concerned about a phenomenon they call "jackpot fatigue," meaning gamblers no longer get excited at the prospect of winning only a few million dollars. Therefore, greater prizes are needed to get their money. Remember the craze over the $295 million Powerball jackpot last summer? Lottery officials defend their livelihood by asking what harm there is if someone who can afford to bet chooses to throw away a dollar on an 80 million to one long shot. But that is not where Powerball and other lotteries make their money. They rake it in from "players" such as Ernie Kovic, a 28 year old Bronx waiter studying aircraft design at a trade school. Last summer, Kovic stood in line to buy $3000 worth of Powerball tickets – money he had been saving for tuition. Kovic told The New York Times: "If I win, I won’t have to go to school. Heck, I can buy my own aircraft." Guess what? Kovic lost, as did 79,999,999 other gullible betters.¹⁹

There are a multitude of Ernie Kovics wasting their savings, their families and their futures chasing the tantalizing but false hopes hawked by state lotteries. Ten percent of lottery players account for ½ of all lottery purchases.²⁰ The Washington Post, after examining lotteries in Maryland, Virginia, and Washington, D.C., concluded that they "rel(y) on a hard core of heavy players, who, on average, have less education and lower incomes than the population as a whole.²¹

The Boston Globe documented how the lottery saturates poor Massachusetts neighborhoods with outlets. For example, Chelsea, an economically struggling community, has one lottery retailer for every 363 residents. By comparison, the affluent suburb of Milton has one for every 3,657 residents. Chelsea residents, many of whom are on welfare, spend nearly 8% of their incomes on lottery tickets. That amounts to more than $900 per person annually.²² During a lunch break from the Boston commission hearings, our staff and I drove to another economically depressed community named Mattapan. I stood in a liquor store there and watched poor people coming in to buy lottery tickets. The scene saddened me. I asked one man, who stated he was 58, but looked more like 70, why he came in to buy several tickets nearly every day. He said, "This is my retirement plan. I’m going to hit it big." He continued on: "I play every day… I lose more than I win – but I won $100 one time."

Lottery administrators know exactly who their customers are, which is why they often target the poor with their marketing schemes. An advertising plan for the Ohio lottery recommended that "promotional pushes" take place at the beginning of the month. Why? Because, government benefits, payroll and Social Security payments are released on the 1^st Tuesday of every calendar month.²⁷ An infamous Illinois Lottery billboard campaign in a Chicago ghetto showed a picture of lottery ticket with the caption: "This could be your ticket out.²⁸ Fat chance!

Lotteries also foster a get rich quick mentality while belittling the work ethic. A Massachusetts Lottery ad offered 2 options for how to "make millions." Let me quote: "Plan A: Start studying when you’re about 7 years old, real hard. Then grow up and get a good job. From then on, get up at dawn every day. Flatter you boss. Crush competition ruthlessly. Climb over backs of co-workers. Be the last one to leave every night. Squirrel away every cent. Avoid having a nervous breakdown. Avoid having a premature heart attack. Get a face lift. Do this every day for 30 year, holidays and weekends included. But the time you’re ready to retire you should have your money. OR ‘Plan B’: Play the lottery."

State spend more than $400 million each year trying to lure residents to gambler on lotteries.³⁰ Here in Colorado, according to the Rocky Mountain News: "The lottery spent $25,000 for a study to analyze the left and right sides of the human brain to understand how to manipulate player behavior. Officials say they aren’t trying to hook people into playing the lottery. But page 15 of the Mindsort report… describes certain people as less likely to begin playing, but ‘once hooked, (always) hooked.’"³¹ A Maryland state audit proposed research into "what game is most effective in luring an individual into playing for the 1^st time."³²

1. Matthew J. Carlson & Thomas L. Moore, "Adolescent Gambling in Oregon: A Report to the Oregon

Gambling Addiction Treatment Foundation," Oregon Addiction Treatment Foundation, December 1, 1998; Lynn S. Wallisch, "Gambling in Texas: 1995 Surveys of Adults and Adolescent Gambling Behavior," Texas Commission on Alcohol and Drug Abuse, August 1996, 97.

2. Howard J. Shaffer, "The Emergence of Youthful Addiction: The Prevalence of Underage Lottery Use

and the Impact of Gambling," Massachusetts council on Compulsive Gambling, Jan. 13, 1994, 9.

3. Scott Harshbarger, Attorney General, commonwealth of Massachusetts, "Kids and Keno are a Bad Bet:

A Report on the Sale of Keno Tickets to Minors in Massachusetts," October 1996, 1.

4. James Westphal, Jill Rush, Lee Stevens, Ron Horswell, and Lera Johnson, "Final Report Statewide

GAMBLINGS TRICKS OF TRADE US NEWS 3/14/94, pp 42ff

In 1955, for example, baseball commissioner Ford Frick considered wagering so corrupt he prohibited major leaguers from overnighting in Las Vegas. Last year, by contrast,

Americans for the first time made more trips to casinos than they did to Major League ballparks-some 92 million trips, according to one study. Casinos "suck money out of the local economy," away from existing movie theaters, car dealerships, clothing shops and sports arenas.

In Atlantic City, for example, about 100 of 250 local restaurants have closed since the casinos debuted in 1978, says Goodman, who teaches at the University of Massachusetts at Amherst.

In New Jersey, for example, horse racing alone accounted for about 10 percent of state revenue in the 1950s. Today, despite the addition of a lottery and 12 casinos, the state earns only 6 percent of its revenue through gambling. "Atlantic City used to be a slum by

the sea," says Rose (gambling law professor and paid industry consultant). "Now it's a slum by the sea with casinos."

Fifty-one percent of American adults now find casino gambling "acceptable for anyone," and 35 percent describe it as "acceptable for others but not for me," according to a recent Yankelovich Inc. survey paid for by Harrah's Casinos.

* "If you give a guy a $100 bill he look at it like a round of golf; a golf cart, two beers and a hot dog. But if you give him chips, its just betting units and it loses all its value. "

Bill Zender, Operations Chief, Aladin Casino, Las Vegas

* Bob Stupak, Las Vegas Casino Owner On greed: "We target everybody. That's the business I'm in. Money's money. What's the difference if it's a Social Security check, a welfare check a stock dividend check?"

* "Our goal is not to get more out of a customer in 3 hours, but to get him to stay for 4 hours." Bob Renneisen, President and CEO of Claridge's Casino, Atlantic City.

THE RETURN ON LOTTERY INVESTMENT? According to information in Newsweek, June 11, 1983 p. 68, proponents of legalized lotteries claim that it is possible to generate 40% of the total betting pool for state income. As of June, 1983, only 8 of the 17 states received as much as 40% of the total betting pool. Some received as little as 25%.

THE PATTERN OF STATE LOTTERIES. State operated lotteries follow a pattern. They usually begin with some form of weekly drawing. Because of the novelty, many individuals who do not gamble try it. As the novelty wears off and as few of them win anything significant, the amount of money generated declines. Another form of the lottery introduced, usually an "instant" form which involves the purchase of a ticket with a "rub-off" square. Some figure or symbol will indicate if the ticket is a winning ticket. Since most of the spaces do not contain a winning number or symbol, most of the tickets are losers. Again interest declines. Then, to hike its revenue, the lottery introduces some form of the "numbers" or player selection game. In games of this type, the bettor chooses some combination of numbers. Usually on a daily basis, a winning number is selected. This form of the lottery is the only one which has sustained any real momentum among the different forms of state operated lotteries.

EARLY LOTTERIES (from G. Robert Blakely's work: "State Conducted Lotteries: History, Problems and Promises," The Journal of Social Issues, vol. 35, 1979)

Proponents of legalized lotteries often point to the prior existence of legalized lotteries in the United States. But they fail to mention that frequently the minimum amount which could be wagered might be as high as $10, which was a significant minimum in the 17th and 18th centuries designed to prevent poor people from being preyed upon unduly. And proponents also fail to mention that in the early English lotteries, everyone received a prize.

By the early nineteenth century, strong opposition was developing to legalized lotteries. Three reasons were cited: (1) lotteries were a financial drain on the economy, (2) many lotteries were fraudulent, and (3) lotteries contributed significantly to crime and poverty.

BETTING ON A STROKE OF LIGHTNING R.Digest 7/78 p. 90

For millions of people who live and die by gambling on numbers combinations (lotteries, horse races, etc.), no day could have been more promising than July 7, 1977. When reduced to numbers, that date was 7/7/77. And, by reputation, no number is luckier than 7.

That's precisely what the management of the Meadows harness track near Pittsburgh thought. They promoted July 7 as the "Luckiest Day of the Century." Came the 7th race and the favorite was the number 7 horse, Speech Writer. Perfect. Until shortly before the race. At which time lightning scored a direct hit on the tote board, heavily damaging it and forcing the track announcer to read off the odds.

The symbolism was not lost on the bettors, who, as a breed, are a most superstitious. In fact, last minute bettors backed off Speech Writer en masse. So, naturally, he won.

THE DECEPTION OF "LEGAL" GAMBLING by Brian O'Keefe, R.Digest 3/2001 p. 158ff

Duke University professors Charles Clotfelter and Philip Cook conducted a study for the National Gambling Impact Study Commission that found that 10% of lottery players account for 68% of lottery sales. Similarly, University of Illinois professor Earl Grinols estimates that up to 1/3 of casino revenue comes from problem or problem gamblers.

And there are disturbing cases in which casinos allow known gambling addicts to continue betting.

Today, more kids gamble than are involved with drugs, smoking or drinking, according to Jeff Derevensky, a psychology professor at McGill University in Montreal. One reason: they are growing up with a message that wagering is acceptable. To make matters worse, Derevensky has found that the addiction rate among youths is 2 to 4 times that of the population at large.

Though it's illegal to play most lotteries if you're younger than 18 or 19, studies show that a high share of adolescents buy tickets - 32% in Louisiana, 34% in Texas and 35% in Connecticut. How? In some states, ticket sales aren't always monitored. Plus, automated machines like airports and stores - in use in 29 states - make it easy for young people to play.