This Friday’s Mega Millions drawing, with its jackpot of more than $1 billion — one of the highest ever in the nation’s history — has launched a lot of daydreaming of what life as a billionaire might be like (or, more realistically, a third- or half- billionaire after taxes, depending upon whether the winner takes the cash or annuity option). With 303-million-to-1 odds of winning the big jackpot (and pretty discouraging chances on smaller prizes, too), one presumes that most participants know they’ll be tossing their entries in the trash can by Saturday morning. All in good fun, right?
But there is a dark side to lotteries, which for decades have developed into an increasingly important source of revenue for state governments. A troublingly high percentage of tickets, including daily number games and scratch-offs, are sold in low-income neighborhoods, where the terrible odds turn the lottery into an enormous transfer of wealth in the wrong direction. Think of it as a kind of reverse Robin Hood mechanism, taking from the poor to give to the rich (or at least middle class), whether lottery proceeds go to build or refurbish ballparks like Oriole Park at Camden Yards or simply to spare the affluent from having to pay higher taxes to finance state government responsibilities like public education.
In Maryland, this dilemma was recently chronicled in a well-researched project produced by students at the University of Maryland’s Howard Center for Investigative Journalism. While some care has been taken over the last decade or more with the development of casinos and sports betting to not hurt the vulnerable, the pattern with regular lottery games is clear: In every state, outlets selling these tickets are disproportionately clustered in needy communities. And we’re not talking about pocket change but billions of dollars each year. In Maryland alone, lottery and casino profits totaled nearly $1.4 billion in the last fiscal year making it one of the top three sources of revenue for state government along with income tax and sales tax.
That poor people are taken advantage of in this way is not a new concern. Just drive to struggling neighborhoods in East and West Baltimore, and it isn’t hard to find a corner convenience store selling Maryland lottery tickets. It almost makes one long for the old days of illegal gambling, when people at least had to make an effort to play a numbers game. Now, there’s a stamp of approval from government — along with a lot of mom-and-pop store owners who appreciate the income from ticket sales. It’s great that lottery revenue helps finance schools but at what cost to Sandtown-Winchester or Cherry Hill or Fairfield?
Government shouldn’t be in the business of making life worse for the most vulnerable members of society. Just as efforts have been made in recent years to reduce the number of outlets selling alcohol in low-income areas, to protect the rights of tenants against negligent landlords and to broaden health care coverage, why not take steps to spare people in poverty from being duped by the lottery?
How would this work? It’s hard to know for certain because other states have failed in this arena as well. But what if limits were placed on locations? On sales of certain tickets? On better educating people on what a bad investment lottery games are for the customers (as opposed to the sellers)?
When Maryland’s next governor and members of its General Assembly take office in January, among their priorities ought to be to create a commission to better research the options here and establish what might actually be the best practices for lotteries to still be entertaining (and raise money for good purposes) but to reduce the victimization.
The state already spends millions helping problem gamblers find help, so why not prevent problem gambling from happening in the first place? Lawmakers may well discover that even with reasonable protections, low-income players will continue to spend too much on lottery tickets anyway, but the state should at least try to do something about this unhappy circumstance despite the odds. It’s surely worth a chance.
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