This New York Times story spotlights how state lotteries are luring citizens to lose more money at a faster clip by offering higher priced scratch-off tickets. Once only a $1, now states like Texas are selling $50 scratch tickets.
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Michigan lottery winner squandered $850,000
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.
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.
Public Agency Acts as Casino Debt Collector in Nevada
The taxpayers of Nevada are funding efforts to collect debts for the state’s casino industry. According to the Las Vegas Sun, this is the only state in the country where this occurs. Casinos make a practice of giving out loans, or “markers,” to problem gamblers and those they know have been gambling for hours on end. Instead of hiring private debt collection firms like all other businesses, the casinos charge the taxpayers of Nevada to do this and put the Clark County Assistant District Attorneys to work on their behalf. This allows the predatory gambling industry to keep making huge profits.
Why Does District Attorney Act as Bill Collector for Casinos?
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
Predatory Gambling Operators Profiting Off of High School Football
In October 2011, the Pittsburgh Tribune-Review reported that a group of gambling websites in Costa Rica offers betting odds on high school football games in the state of Pennsylvania. The newspaper reports that the town of Shaler’s athletic director Paul Holzshu had “disgust” for websites and bookies that offer betting opportunities on games teenagers play.
“It sounds to me like we are at the mercy of people who don’t give a damn about the educational quality of what we’re doing,” Holzshu said. “They’re just trying to make a buck off kids who are innocent. People are exploiting kids by betting on games.”
High School Football Betting Rankles Pennsylvania Athletic Officials
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.”
Penn National Finds a Way to Market to Problem Gamblers
In 2008, the Illinois Gaming Board fined Hollywood Casino, owned by Penn National, $800,000 for marketing to customers who put themselves on the state’s self-exclusion list. “As part of a campaign to develop new customers, the casino rented a list of names from a firm that operates ATM machines at Illinois casinos. In January, the casino mailed promotional materials, including coupons to use at Hollywood Casino, to nearly 15,900 people identified as prospective customers. However, the casino’s marketing department failed to check the list against the names of people enrolled in the Gaming Board’s Self-Exclusion Program. The board said 146 people in the program received the mailing.”