Lottery Opponents Want Warnings

Bills flew through a money counter with a crisp, robotic rustle. Terminals squealed with each printed lottery ticket. Above it all came the gamblers’ voices, clamoring for Mega Millions, quick picks, Fat Wallets. This was just one day at Carlton Cards in Manhattan’s Penn Station, but it could’ve been any day. It was the soundtrack of New York City’s busiest inadvertent casino.

At its best, the New York Lottery offers players a momentary mental escape to a life of imagined riches. It also delivers billions in profits to the state’s Education Department.

Looked at from another direction, though, the lottery is state-sponsored gambling that comes with little warning of its addictive potential or the financial toll it can take on players’ lives. That's why some gambling opponents are calling for the New York Lottery to better warn players that they are risking more than a dollar here and there.

Every lottery player hungers for a taste of fabulous wealth, but the size of that appetite and the willingness to pursue it vary widely. About 80 percent of New Yorkers gambled on the lottery in the past 12 months, according to lottery officials. Using fiscal year ’09 gross revenue and 2008 census estimates, that works out to about $630 annually per player.

But not all players are equal. For the vast majority of gamblers, playing the lottery involves only a few bucks here and there. That means that on the other side of the scale, quite a few players lose a lot of dough chasing the big payday. A National Opinion Research Center study found in 1998 that 5 percent of lottery gamblers accounted for 54 percent of the spending. Apply those percentages to the most recent New York sales and population statistics and the results are notable: 600,000 players spending over $6,800 annually.

These days, the state needs its lottery revenue as much as ever, so the New York Lottery is constantly seeking revenue-growth opportunities. The latest is Powerball, which New York joined in January. It’s the state’s second multistate jackpot game (Mega Millions is the other) with extremely long odds—1 in 195 million—and the lure of unworldly riches.

That worries those who work with gambling addicts. “We're getting rid of all the safeguards and we're not putting in structures to help the family and people affected by problem gamblers,” said Jim Maney, executive director of the New York Council on Problem Gambling. “It's like building a road and not putting in the guardrail.” The council estimates that there are 600,000 New York adults with a gambling problem plus another 140,000 adolescents.

New York’s lottery is built for expansion, though, not prevention. State law requires that all lottery profits funnel to the Education Department. The New York Lottery’s job is to maximize that contribution by growing revenue, and it’s done a really good job in that regard. The lottery pitched in $2.54 billion—about a third of lottery sales—for the year ending March 2009. That amount is 12 percent of all state aid delivered to local school districts.

The lottery is a boon to small businesses, too. All the bodegas, convenience stores and gas stations that sell lottery tickets—almost 17,000 across the state—earned over $400 million in lottery commissions during fiscal year ’09. (Sellers get six cents for every dollar of tickets sold.) Daily sales at Carlton Cards average between $25,000 and 30,000, according to Vijay Sampat, the store’s manager.

Retailer commissions are part of the lottery’s operating expenses, as are advertising expenses. The agency spent $81 million on marketing during fiscal year ’09.