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Cerabino: Lottery ticket purchases cost the poor the most

By Frank Cerabino - Palm Beach Post Staff Writer

Pop quiz: How much money does the average Floridian spend every year on state lottery tickets?

Or to put it another way, if you take all the money spent last year buying Florida Lottery tickets and divide that number by the total number of Floridians — counting kids, too — how much money is that in lottery purchases per person?

The answer is $233.

It was one of those numbers I found buried in the 784-page Florida Gaming Study that state legislators commissioned as they weigh whether to expand gambling in the state.

As Florida struggles to rise from a long recession, the various games that make up the Florida Lottery set a record last year of $4.45 billion in sales. And lottery purchases per capita in Florida have doubled during the past 20 years.

It reminded me of a passage from George Orwell’s dystopian novel “1984,” in which citizens, called “proles,” were mesmerized by the lottery run by the Ministry of Plenty.

“The Lottery, with its weekly payout of enormous prizes, was the one public event to which the proles paid serious attention,” Orwell wrote. “It was probable that there were some millions of proles for whom the Lottery was the principal if not the only reason for remaining alive. It was their delight, their folly, their anodyne, their intellectual stimulant. Where the Lottery was concerned, even people who could barely read and write seemed capable of intricate calculations and staggering feats of memory.”

You could certainly make an argument against Orwell’s dim view by pointing out the benefits of the Florida Lottery, which include employing 449 people, giving 13,138 retail outlets a cut of the money and funding billions of dollars in public education.

The Florida Lottery supports construction and operating budgets of schools and allows millions of dollars in grants to flow to state colleges and universities. It has also funded more than 600,000 Bright Futures college scholarships for Florida teenagers.

And yet there’s something Orwellian about the lottery, too.

The study conducted by the gaming research Spectrum Gaming Group echoed what other lottery studies have found: that the poorer you are, the more likely you are to spend money on the lottery. Uneducated laborers are far more likely to play the lottery than educated professionals — especially instant-winning scratch-off games. And minorities are more likely to play than whites.

“Lotteries are, by far, the most profitable form of legalized gambling,” the gaming study reported. “For each $1 ticket sold, the state keeps approximately 50 percent as ‘net revenue.’”

The state lottery functions as a voluntary tax with a disproportionate burden on the poor.

This is especially onerous in Florida, which is one of the most regressive tax states in the nation, according to the Institute on Taxation and Economic Policy.

Because Florida relies on raising money from sales tax and excise taxes on cigarettes, alcohol and gasoline instead of a progressive income tax, the poorest 20 percent of the population pay about 13.5 percent of their income in taxes, while the middle 60 percent pay 7.8 percent and the top 1 percent pay 2.6 percent, the institute found in a 2009 study.

The lottery makes that regressive tax burden even worse.

“In addition, studies have found that the benefits from lottery-funded educational initiatives tend to accrue to high-income individuals,” the gaming study reported.

It cited a Georgia lottery study that found that people who make under $25,000 a year spend more on lottery tickets than they get back in educational benefits, while people who make more than $50,000 a year receive a net positive benefit from the lottery. And there’s a racial component to that, too, according to the study, which was published in the National Tax Journal.

“White households tend to spend less on playing the lottery than nonwhite households but receive substantially higher benefits from lottery-funded programs, on average,” it reported.

So, I’m going to reserve my applause for the record-breaking ticket sales coming from Florida’s Ministry of Plenty.

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