This blog post from WalletPop.com outlines the reasons why people on low-incomes spend so much on lottery tickets: the hype about big jackpots, the ritual of playing and the fact that many people believe that playing the lottery is best way to achieve financial security.
Lotteries
Even The Casinos Call the Lottery Bad Policy
This story from the Seattle Times discusses how casino companies are fighting the introduction of a state lottery in Nevada. They call the lottery a regressive tax on the poor because they spend a higher proportion of their income on lotteries.
Lottery Advocates, Opponents to Face Off Again in Nevada Legislature
From Rags to Riches to Rags
This article from the Tampa Tribune tells the story of Rhoda Toth, whose life was transformed by winning a $13 million lottery jackpot. She went from meeting Donald Trump and building a $92,000 swimming pool for herself to serving time in federal prison and living in a mobile home. Looking back at the day she won the lottery, Toth recalls: “It was my worst day.”
Jackpot Winners Just as Likely to Go Bust
This article from Yahoo! Finance explores the fact that for financially troubled consumers, the size of a lottery jackpot may not matter: Five years out, people who win $150,000 are just as likely to declare bankruptcy as those who win less than $10,000.
Montana Gambling Study Commission Report
This report prepared by the University of Montana’s Bureau of Business and Economic Research for Montana Gambling Study Commission found that gambling addicts account for 36% of video gambling revenues.
Montana Gambling Study Commission Report 1
Montana Gambling Study Commission Report 2
Montana Gambling Study Commission Report 3
Montana Gambling Study Commission Report 4
Montana Gambling Study Commission Report 5
Montana Gambling Study Commission Report 6
Misrepresented Game Outcomes and Problem Gambling
This research by Prof. Kevin A. Harrigan at the University of Waterloo looked at how slot players’ perceptions were influenced by a technique that has been used since 1983 in North America, called “clustering.” By observing the player perceptions (the frustration effect, the perception of early wins, illusion of control, biased evaluation of outcomes, entrapment, and irrational thinking) as well as looking at transcripts from Nevada hearings where proponents were aware of the psychological effect on players from near misses and virtual reels, the researchers raise concerns over the connection with misrepresented game outcomes and problem gambling.
Slot Machines – Pursuing Responsible Gambling Practices for Virtual Reels and Near Misses
Slot Machines: Distorted Player Views of Payback Percentages
This paper by Prof. Kevin A. Harrigan at the University of Waterloo presents a sample three-reel three-coin slot machine game with a bonus for three coins, and a true payback percentage of 85.6% when one or two coins are wagered and 92.5% when three coins are wagered. The player sees the winning or losing combination of three symbols on the payline as well as (a) the physical reels as they scroll by and (b) what is just above and just below the payline at the end of play.
The Design of Slots and the Implications for Problem Gamblers
This research by Prof. Kevin A. Harrigan at the University of Waterloo examines characteristics of Ontario slots and what the implications are for problem gamblers, including analysis of the probability accounting reports (or PAR sheets) to see how the games are designed. One of their key findings include: “Bonus modes are highly salient environments associated with wins that are in the view of the gambler a very good place to be. Because entering these arousing and highly rewarding bonus environments is rare, only those who gamble frequently will become classically conditioned to these environments and experience the combined effects of operant and classical conditioning – a situation that could preferentially target problem gamblers.”
PAR Sheets, Probabilities and Slot Machine Play – Implications for Problem and Non-Problem Gambling
Australia’s National Gambling Report
According to this report prepared by the Productivity Commission of Australia, it is estimated that severe and moderate problem gamblers made up only 4.7% of the population, but contribute 33% of net gambling revenues and 42.4% of gambling machine revenue.
Australia’s Gambling Industries 1999 Report Vol. 1
Texas Lottery Study Shows the Lottery Squeezing More Money Out of a Smaller Amount of People
This Texas Lottery Commission report finds that the percentage of Texans using the state’s lottery has plunged to one-third, the lowest level ever measured. The decline in fiscal 2010 — from 41.7 percent of residents to 33.8 percent — represents the second-largest year-to-year decrease since the Texas Lottery started in 1993. Yet despite this massive drop, the total amount of money spent on Texas Lottery tickets has held steady, which means a smaller amount of people are spending a lot more on tickets. It explains why Texas sells a $50 scratch ticket.