Fraud

The Big Swindle- the poor are the biggest losers in state lotteries according to Cornell study

Cornell University Economics Professor David Just, one of America’s top researchers into state lotteries, wrote a persuasive op-ed for CNN about who play the lottery and why. The link is below. Here is an excerpt:
“Those in poverty or near poverty not only are more likely to play the lottery than those with greater means, they also spend a larger percent of their money on average on these games of chance.
Some have argued that this may not be such a bad thing if the poor basically play the lottery as a cheap form of entertainment.
However, when we look for the telltale signs of entertainment behavior, they are absent.
We don’t see evidence that changes in the availability or price of other entertainment, movies for example, lead to changes in lotto purchases.
Rather, we find there are big jumps in lottery purchases when the poverty rate increases, when unemployment increases, or when people enroll on welfare.
Lottery playing among the poor is a Hail Mary investment strategy —a small ray of hope among the hopeless.
But this false hope is, by design, an attempt to lure the emotional decision -maker. Recent changes in the Mega Millions lottery have reduced the chances of winning in order to increase the size of the jackpot.
By changing the range of the six possible numbers drawn — from between 1 and 56 to between 1 and 75 –the already improbable odds of 1 in 176 million have diminished to a virtually impossible 1 in 259 million. Fewer big winners means larger jackpots, more hype and more
players. And more money for the lotteries.
Such changes have occurred as the lottery commissions have become expert in swindling players out of their money. Humans aren’t particularly good at dealing with risks and gambles. We tend to believe that rare events are more common than they truly are.
Moreover, we don’t discern between small changes in very low probabilities. Thus, few will have noticed that the odds of winning the lottery reduced from 0.000000006 to 0.000000004 for any given ticket. But our eyes are drawn to the steadily increasing prizes — prizes that are now designed to
eventually exceed $1 billion. Such astronomical amounts draw in even those who consider themselves very prudent.
Approximately one third of lottery winners will declare bankruptcy. This happens primarily because new winners are so unfamiliar with the magnitude of the money they have won, that they simply overestimate the purchasing power. How could I ever need to budget when I have several hundred million in the bank?
 
The overwhelming majority of lottery winners don’t believe they are better off for having won. One study finds that recent lottery winners have lower levels of happiness than do those who have recently become quadriplegic.”

2013 The big swindle- In lotteries, the poor are the biggest losers

LesThe Big Swindle- the poor are the biggest losers in state lotteries according to Cornell study
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Report shows the bias in years of casino industry-funded research

Research into gambling and casinos has been severely tainted by money from casino interests according to a new report by Goldsmiths College at the University of London. It draws on testimony from researchers who admit that they have lied, omitted data, or otherwise tampered with results of their research because it was funded by casino interests. One researcher says, “I was really scared about potentially annoying the industry and then getting my reputation trashed because I saw that happen… and it was really horrible. So I had a choice, say everything is fine. In other words, lie.”  This article from The Independent details this shocking report that casts doubt on the validity of years of research.

2014 Is gambling research biased? You bet it is

LesReport shows the bias in years of casino industry-funded research
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Investigating the Lottery’s “luckiest woman”

This 3-part series, from Philly.com, examines the story of Joan Ginther, a woman from Texas who won millions off of scratch tickets over several years. Her story captured headlines worldwide when she won $10 million on a single scratch ticket in June 2010. Mathematicians estimated the odds of someone winning as much as Ginther has at 1 in 18,000,000,000,000,000,000,000,000, or 18 septillion. However, this series explains that with a little luck and patience, it might not be so difficult to cheat one of America’s biggest industries.

2014 Lottery’s ‘luckiest woman’ bet flabbergasting sums on scratch-offs

2014 How Lottery legend Joan Ginther likely used odds, Uncle Sam to win millions

2014 Lottery mystery yields clues to missing $7.5 million prize

LesInvestigating the Lottery’s “luckiest woman”
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The rise of penny slots

The name “penny slot” implies that these machines are essentially harmless- after all, what use is there for one penny? However, these machines, which are rapidly growing in popularity, garner huge profits for casinos at the expense of players. These machines attract mainly lower-income players, lured by the idea that one penny can net them some extra cash. Most “penny slots” actually require you pay more than 1 cent per play, with some requiring 25 or 50 cents, and others requiring bets of over $1. Players put more than $500 million into penny slots in January alone, and given the high profits they give to casino owners, casinos are starting to install more and more of them. This article, from the Press of Atlantic City shows how one penny can cost gamblers a lot more than you might think.

2014 Penny slots are popular, flexible and profitable

LesThe rise of penny slots
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80 years of slot machine trickery

This article, dated December of 1932, over 80 years ago, explains how slot machines are built to make players lose, and it still remains true today.  It not only goes into detail as to how these machines mathematically cheat players out of their hard-earned cash, but it serves to show that these machines have been swindling players out of their money for generations.

Machines that Pick Your Pocket

Les80 years of slot machine trickery
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Even casino industry researchers call racinos a sham

Even the researchers funded by casino interests admit slot machines do nothing to help horse racing and the workers connected to it. The late Bill Eadington, who was the director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada, Reno, told the Maryland Capital News Service in 2013, “The whole phenomenon of racetrack casinos has really been a sham. It’s done virtually nothing to increase the demand for horse races.”

2013 Casinos drawing mostly local crowds

LesEven casino industry researchers call racinos a sham
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Investigation of Iowa Lottery shows improvements need to be made

This in-depth, exhaustive study of the Iowa Lottery shows that the lottery has to make improvements to protect its customers and its integrity. The author uses the investigation to create a list of improvements the lottery can make to improve. Take some time to read this interesting investigation.

2009 Taking Chances With Integrity Iowa Lottery

LesInvestigation of Iowa Lottery shows improvements need to be made
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American Gaming Association head exposed for lying about the make-up of casino customers

Gambling operators are the only business that endlessly tries to draw attention away from what their business actually does. No one practices this deceit more than the American Gaming Association.  Former AGA head Frank Fahrenkopf was exposed in a Miami Herald story in which he was quoted as saying:”the majority of people traveling to these ‘destination resorts’ are not going for the primary purpose of gambling.” He made the claim amid an intense lobbying campaign for casinos in Florida. PolitFact investigated his claim and not surprisingly, found it to be untrue for casinos outside of Las Vegas.

2013 Gambling advocate says most people go to high-end casinos for amenities, not gambling

LesAmerican Gaming Association head exposed for lying about the make-up of casino customers
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10 reasons why lotteries are bad for the economy

This article from Salon.com outlines the ten strongest reasons why state lotteries hurt the economy and the poor. It explains how lotteries not only hurt those who play, but also hurt local business and help foster crime.

10 reasons state lotteries ruin the economy

Les10 reasons why lotteries are bad for the economy
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