Midland, Michigan attorney John Wilson said his lottery-winning client Leroy N. Fick took about a year to blow through $850,000. At Fick’s sentencing on a felony charge of illegal possession of prescription painkiller in Isabella County, Wilson said Fick lives on a fixed income of $1,100 despite having won nearly $2 million in the state’s Make Me Rich! lottery in June 2010. After taxes, Fick received a lump sum of about $850,000. Fick spent $200,000 on the construction of a new home and about $200,000 in annuities, Wilson said. The majority of the remainder was lost in ill-advised investments suggested by Fick’s friends and relatives and fireworks. In 2011 Fick was charged in Bay County with three misdemeanor counts of possession of illegal fireworks. Isabella County Trial Judge Mark H. Duthie sentenced Fick to 45 days in jail.
Lotteries
Australian Government Study Shows Predatory Gambling Costing Citizens $4.5 Billion Dollars Per Year, the Bulk of Costs Deriving from Video Slot Machines
According to the 2010 Australian Productivity Commission report (their government’s independent research and advisory body) which provides an in-depth analysis of the effects of the predatory gambling business on the nation, predatory gambling now costs Australian society about $4.5 billion dollars per year – the bulk of costs deriving from video slot machines. These costs exceed benefits when “excess” losses by problem gamblers is included. Cost per year per adult translates to $210. $1 U.S. dollar = $1.08 in Australian dollars as of Oct 23, 2009. You can find a longer summary of the report’s findings in the Profits from Gambling Addicts section.
The Definition of a Pathological Gambler
According to the American Psychiatric Association, in order to be diagnosed as a pathological gambler, someone must meet five of the ten criteria below:
- Committing crimes to get money to gamble
- Feeling restless or irritable when trying to cut back or quit gambling
- Gambling to escape problems or feelings of sadness or anxiety
- Gambling larger amounts of money to try to make back previous losses
- Having had many unsuccessful attempts to cut back or quit gambling
- Losing a job, relationship, or educational or career opportunity due to gambling
- Lying about the amount of time or money spent gambling
- Needing to borrow money due to gambling losses
- Needing to gamble larger amounts of money in order to feel excitement
- Spending a lot of time thinking about gambling, such as remembering past experiences or ways to get more money with which to gamble
Economists Find That Gambling Revenue Comes At the Expense of Sales Tax Revenue
Economists John Jackson and Douglas Walker published an article in Contemporary Economic Policy in early 2011 that showed that the increased revenue that comes from gambling often comes at the expense of sales tax revenue. The two also came to the conclusion that, in general, casinos and greyhound racing tend to decrease state revenues overall.
Nobel-Prize Winning Economist Paul Samuelson on Gambling
“There is a substantial economic case to be made against gambling…it involves simply the sterile transfers of money or goods between individuals, creating no new money or goods. Although it creates no output, gambling does nevertheless absorb time and resources. When pursued beyond the limits of recreation, where the main purpose after all is to “kill time,” gambling subtracts from the national income.”
From Economics, 6th edition, 1970
Mass. Lottery Officials Knew and Encouraged Manipulation of Game
The Boston Globe exposed that just three groups of bettors accounted for most of the winning tickets statewide for the lottery game Cash WinFall. Massachusetts Lottery officials initially said they were surprised to learn that just a handful of gamblers had taken over the $2 games and announced new rules to limit the dominance of sophisticated bettors.
Upon further investigation, the Globe “has found that lottery managers for years allowed and some say even encouraged the groups to manipulate the game, Cash WinFall. They provided extra ticket machines and printers to accommodate the biggest player, a retired store owner from Michigan, so he could buy more tickets faster. Gerry Selbee, whose gambling group spent millions of dollars on the game, said the regional director in Western Massachusetts personally thanked him for propping up flat lottery sales.”
The Definition of Addiction Changes
The American Society of Addiction Medicine has a developed a new way of classifying addiction. “The definition, a result of a four-year process involving more than 80 leading experts in addiction and neurology, emphasizes that addiction is a primary illness – in other words its not caused by mental health issues such as mood or personality disorders, putting to rest the popular notion that addictive behaviors are a form of “self-medication” to, say, ease the pain of depression or anxiety.”
This new definition refutes a great deal of research funded by predatory gambling operators that claim that gambling addicts are merely suffering from another form of mental illness and that they would simply substitute a gambling addiction with another addiction.
Bad Odds for Youth Gamblers
A recent Johns Hopkins study found that gambling was considered to be normal behavior among a survey of adolescents, particularly among males. Even more troubling was that 12 percent of the participants had behavior considered to be “problem gambling” – much higher than the 1 to 3 percent that is normally attributed to U.S. adult populations.
Government Study Reveals the Massive Cost of Problem Gambling
While government-sanctioned gambling is often trumpeted as a new source of revenue, a 2013 study shows shows the staggering cost of problem gambling. This national Australian report reveals that the social and economic cost of problem gambling could total up to $2.8 billion per year.
Lotteries Generate More Revenue Than Corporate Income Taxes in Some States
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In this Reuters piece, David Cay Johnston examines the shift in 11 states that shows, lotteries, the most heavily taxed consumer product in America, generate more revenue than state corporate income taxes. For example, the Rhode Island Lottery netted the state more than $3 for each dollar of state corporate income tax in fiscal 2009. Johnston also spotlights how the increasing trend toward easy reliance on lotteries has not translated to increased revenue for states.