Today 43 states and the District of Columbia operate lotteries, up from 37 states plus D.C. in 1999. They were begun to avoid spending cuts in times of decreasing revenues and budget gaps. Last year total state lottery sales topped billion. Sales exceeded billion in 21 lottery states, with New York coming in first at .2 billion, according to the North American Association of State and Provincial Lotteries.
However, since the start of state lotteries, anti-gambling advocates have questioned their aggressive marketing tactics and problem gambling issues. Opposition is growing faster now that lotteries are turning to online and mobile sales.
Les Bernal of Stop Predatory Gambling, which advocates ending state-sponsored gambling, said, “State lotteries have a business model that’s based on getting up to 70 to 80 percent of their revenue from 10 percent of the people that use the lottery. They can talk all they want about how much they care about citizens, but state lotteries are the poster child for the rising unfairness and inequality in our country.”
A report by Stateline of state lottery sales indicated which states rely heavily on lottery “super users.” In 2014, Rhode Island, South Dakota and Massachusetts lottery sales topped $700 per capita. Ten states had per capita sales below $100. The average per capita sale for all state lotteries was about $250.
As a result, legislators in several states have sponsored lottery-targeted measures. For example, lawmakers in Kentucky and New Mexico stopped measures allowing lottery ticket purchases by credit card. In Ohio, a multi-million dollar campaign helped raise awareness about problem gambling.
In Minnesota, a bipartisan bill sponsored by Republican state Rep. Chris Swedzinski would require 25 percent of lottery billboards to be dedicated to a notice about the odds of winning, warnings about addiction and information on problem gambler services. But Ed Van Petten, executive director of the Minnesota Lottery, said, “A number of the legislators kind of realized quite honestly that it’s kind of absurd to require the least problematic gaming there is to go miles beyond the most addictive as far as warnings. Do we require every business that has a downside to have warnings such as that?” Some legislators also questioned why the lottery would be required to include such warnings but not Native American casinos. The bill still is in committee but could be heard before the Minnesota legislature adjourns in May.
Another issue of concern in some state legislatures is whether lottery tickets should be sold online, via smartphones, video slots or at gas pumps and ATMs. Anti-gambling advocates oppose these sales strategies as attempts to lure more money from gamblers. But lottery officials see these sales outlets as new revenue streams that will keep lotteries relevant in the digital age. Terry Rich, president of the North American Lottery Association and head of the Iowa Lottery, said, “Ultimately, we don’t want to be the post office. Gaming, and especially the lottery, is one of the last things you can’t do on your mobile phone.”
Van Petten of the Minnesota Lottery agreed. “We have an obligation as the lottery to keep up with the times. To do that, you have to have a presence on the internet. Minnesota Lottery officials recently decided to move forward with ticket sales at gas pumps and ATMs despite objections from the legislature. Republican state Rep. Greg Davids, chairman of the House Taxes Committee, said, “It’s kind of like the lottery’s gone wild. This is way out of control. They’re trying to get another generation hooked on gaming.”
Last year Democratic Governor Mark Dayton vetoed a bill that would have blocked online scratch-offs and ticket sales at gas pumps and ATMs. However, a similar measure has resurfaced this year.
Meanwhile in South Dakota, lottery officials do not plan to offer online ticket sales, said South Dakota Lottery Executive Director Norm Lingle. But he’s observing the results in other states. “We are watching the roll-out in other states that do have online gaming. I think most of them have been positive experiences and they have been generating some level of revenue.” State lottery revenues are down $17 million from their historic highs.
