Lottery Misses Mark on Minorities’ Fair Share

In July the Howard Center for Investigative Journalism at the University of Maryland released the findings of a landmark research project into state lotteries, which highlighted their impact on low-income communities. 

The year-long investigation looked at data from 45 states, including Oregon, and found that lotteries depend on low-income communities, and especially on Black and Hispanic communities, to raise profits.

The study concluded that, “Increasingly powered by multinational corporations, state lotteries have become the engine of a multibillion-dollar wealth transfer that relies on spending by less-educated and less-wealthy Black and Hispanic Americans.” 

The research is raising questions about the costs and benefits of state lotteries, such as:

• How have states have become dependent on their lotteries to run basic services such as schools, parks and veterans’ services?
• Why are lawmakers allowing low-income people – especially BIPOC communities – to shoulder the burden of supporting these services?
• Could the profits be more fairly distributed so as to benefit the communities who disproportionately pay into lotteries?

The college’s news service published a five-story news package, Mega-billions: the great lottery wealth transfer, which details the full findings, exploring how unregulated advertising, lobbying from the largest lottery management firm and the influence of the multinational industry’s largest player created the state lottery we have today. 

Oregon’s Games

The Oregon Lottery’s most recent advertising slogan is “Together, we do good things”. But when we look at where the profits are coming from and where any potential benefit from lottery profits flow to, is this really true? 

Started in 1985 after a national industry-financed lobbying campaign succeeded in legalising state-managed gambling, The Oregon Lottery is the state’s second-largest source of income after income-tax. 

Last year the Oregon Lottery made its highest ever profit – $968.8 million, according to a report for the July 22 meeting of the Lottery Commission. 

The majority of that profit comes from video terminals, and plans are underway to budget a $35 million spend to replace the 80 percent of terminals that are reaching the end of their life-cycle.

Who pays the price?

Unlike income tax, where the wealthiest people contribute most, the Oregon Lottery takes in disproportionately more money from the poorest neighbourhoods. 

Click the above image for an interactive map showing where lottery retailers are located and demographic features of neighborhoods in which they are located. (Image/screenshot from Howard Center)
The Howard Center’s new research project includes an interactive map where you can see where the state’s 3,896 lottery retailers are located by census tract.

Search for Multnomah County, Oregon, for example and the description says: “Of this county's 171 tracts, the 148 tracts with retailers have a median income of $72,433. Those without retailers have a median income of $95,428.”

Compared to other states Oregon’s Black and Native American populations are relatively small. Yet the picture of higher numbers of lottery retailers in neighbourhoods with a larger share of Black and Native American residents holds true. 

The Howard Center’s national research confirms Oregon Lottery’s own analysis. In 2018 the lottery published demographic statistics showing that in 2017, more than 36 percent of players were people who earned less than $50,000. That analysis showed that more than 40 percent of lottery retailers were clustered in three counties: Multnomah, Washington and Clackamas, with Multnomah home to almost a quarter of the state’s lottery retailers at 23.3 percent. 

This suggests that Multnomah County is the largest source of Oregon Lottery profit for the entire state, followed at a distance by Washington and Clackamas counties.

The harms of problem gambling

For some people the thrill of gambling can become compulsive. Human brains respond to the risk-reward cycle of gambling, in much the same way they respond to drugs. Gambling addiction is an unavoidable side-effect of gambling.

The impact on people's lives can be catastrophic as addicted gamblers can spend far beyond their means, to the point of losing everything they have and building up unmanageable debt. Not only does this harm the problem gambler, it also hurts their families and their communities.

The introduction of video poker and other online forms of gambling has coincided with the growth of the industry. The impact of these new games is still being studied.  

The Oregon Lottery prides itself on following standards on responsibility and in acting to address gambling addiction. Its certification with the World Lottery Association places it at the highest level for Responsible Gaming programs.

“The organization runs a complex business that earns profits in a responsible way to reduce potential social costs such as gambling addiction,” it says on its website.

Call the Oregon Problem Gambling Helpline 1-877-695-4648 24 hours a day, 7 days a week to speak with someone who can connect you to services and help. Or text 503-713-6000 between the hours of 8am and 9pm M-F.

Oregon Problem Gambling Resources offers guidance on gambling safely and problem gambling with a list of resources by county. If you’re outside Oregon The National Council on Problem Gambling (NCPG) also runs a confidential hotline: 1-800-522-4700.

Can the Lottery be a win win?

The Lottery is sending more than $500 million to Oregon’s budget for schools, state parks, veteran housing, outdoor school bond and housing projects. 

And according to the 2021 financial report the Lottery sent $652.5 million to Oregon’s Economic Development Fund, $69 million more than in 2020.

Rep. Marty Wilde (D-Eugene), told Willamette Week that Oregon is so dependent on lottery funding that any move to limit lottery revenues would threaten the viability of lottery-funded bond projects. Wilde said he is not against gambling but he called for a moratorium to make space for a careful look at the impacts of the current games and at how to reduce the harms on our communities.

The Oregon Lottery has been a long-time supporter of The Skanner Foundation, which supports scholarships for high school students from communities in Portland to attend college. 

But the questions raised by the Howard Center’s research remain on the table. 

Are the benefits of Lottery funding reaching the communities who are paying the most into Oregon’s games?  

Is enough being done to mitigate the harm caused by gambling?

Are low-income people in Black and Native American communities subsidizing Oregon’s schools, parks, and economic development? 

Please submit your comments about the Oregon Lottery to: aurora@theskanner.com or mail to The Skanner, P. O. Box 5455, Portland OR 97228.

The Oregon Legislature set up The Joint Legislative Committee on State Gambling Regulation in April 2022 to review the policies and structures that regulate state-sanctioned gambling and to take a comprehensive look at the future of the industry in Oregon. They will now be under additional pressure to address equity.