The poor play more – lotteries
Contributing: Rupa Shenoy. Shawn Allee, Dominick Basta, Jocelyn Prince and Julia Steinberger helped research this article.
It’s just minutes before the televised noon lottery drawing, and hurried, last-minute players are lining up inside 115th St. Food & Liquor on Chicago’s South Side.
One of them is 60-year-old homemaker Minnie Vaughn.
“I have no strategy,” she said. “I play the same numbers every day, maybe $7 or $8 worth.”
John Brown started buying lottery tickets the day he turned 18, the legal age for playing the Illinois Lottery.
“On average, I’d say [I spend] about $25 a day,” said Brown, now 36, a laid-off laborer. “But I don’t mind because I know, sooner or later, I’m going to hit something.”
Predominantly African American or Latino, low-income Chicago communities have generated the highest lottery sales in the state, shows an analysis of Illinois Lottery records since 1997 by The Chicago Reporter. In addition, residents in these communities spent a higher portion of their incomes on the lottery than people in more affluent areas. And despite the state’s recent economic downturn, lottery spending has increased, the Reporter found.
In the South Side’s 60619 ZIP code area, lottery players spent more than $23 million on lottery tickets in fiscal year 2002, more than any other ZIP code in the state, according to lottery sales records. The 60619 area includes parts of the predominantly black neighborhoods of Chatham, Avalon Park, Burnside and Calumet Heights.
Brown was among those buying tickets in the 60628 ZIP code area, which lies directly south of 60619 and ranked second among all ZIP code areas with nearly $21 million in lottery ticket sales during the past fiscal year. It includes parts of the mostly-black Pullman, Riverdale, Roseland and West Pullman communities.
“Lotteries are, in essence, a form of regressive taxation that distributes wealth and resources away from those who can least afford to pay,” said Paul Street, vice-president for research and planning at the Chicago Urban League. He said he was not surprised by the Reporter’s findings. “[Lotteries] especially extract wealth from communities of color, and most particularly from African Americans.”
Dennis Culloton, spokesman for Gov. George H. Ryan, disagreed.
“The charge that the lottery exists to spare taxing people of means is a spurious charge,” he said, adding that the governor “has always been concerned about the poor.
“Governor Ryan has always had concerns about the tensions between the state’s budget reliance on the lottery and legalized gambling,” Culloton added.
But that reliance continues.
This year, Illinois faced a budget crisis that forced Ryan to cut state services and agency funding. And without the lottery, things could have been worse, said Illinois Lottery Director Lori Montana.
“The state’s deficits approached or even surpassed $1 billion this past year,” she said. “Had the lottery not transferred $555 million to the state, the budget shortfall could have been significantly larger.”
The Reporter examined lottery sales for each fiscal year since 1997, and compared them with income and demographic data from the 2000 Census.
The 10 ZIP code areas with the highest lottery sales over the last six fiscal years were 60609, 60617, 60618, 60619, 60620, 60628, 60629, 60639, 60647 and 60651. They were all in Chicago and included areas across the city like South Deering, Washington Heights, Irving Park and Logan Square. Census figures showed that eight of those ZIP code areas had unemployment rates higher than the citywide average of 10 percent, and all 10 had average incomes of less than $20,000 a year, compared with a citywide average of $24,000. Census data also show that five were at least 70 percent African American and two were at least 60 percent Latino.
Lottery sales figures, per person, were 29 percent to 33 percent higher in Chicago’s predominantly black neighborhoods than they were in mostly-white or Latino areas.
In fiscal year 2002, lottery spending in ZIP code areas that were at least 70 percent black averaged $224 per person. Lottery spending averaged $169 per person in ZIP code areas with Latino populations of 60 percent or more. And in ZIPs that were at least 70 percent white, per-capita lottery spending was $173.
But the lottery’s public relations director, Anne Plohr Rayhill, said it is not the fault of the lottery that black and poor residents spend more.
“We try not to target anyone,” she said. “We’re visible to everybody. We don’t do the sort of thing where we put a lot of advertising in one area and not another.”
Number-based games of chance have a history in poor, black communities.
Alderman Freddrenna Lyle, whose 6th Ward includes part of the South Side neighborhood where she grew up, remembers the pre-lottery days well.
“As far back as I can remember, we had the ‘numbers runner,”‘ she said. “He came to the door, and he and my grandfather talked. My grandfather gave the man his numbers, and the numbers runner left.”
“I don’t know if anybody ever won,” Lyle added.
Illinois lawmakers first proposed a statewide “numbers” game in 1972 as a way to fund schools. In both 1972 and 1973, state Rep. E.J. “Zeke” Giorgi, a Rockford Democrat, sponsored bills to create the lottery. Giorgi’s bills provided that lottery revenues would be divided between operations expenses, prizes for players and public education, according to Chicago Tribune and Chicago Sun-Times reports at the time.
But even then, critics were skeptical.
“It was basically a way to get money for the state without taxing those who were better off,” said Marty Oberman, alderman of Chicago’s 43rd Ward on the near north lakefront from 1975 to 1987, and a longtime opponent of a state-run lottery. “Of course, the school funding thing was only a ruse.”
Initially, profits from the Illinois Lottery did not directly assist public schools.
When the Illinois House created the lottery in December 1973, the new law stated, “All income arising out of … the State Lottery in the Department of Revenue shall … be paid into the state treasury without delay,” and, “The State Treasurer shall make monthly transfers from the State Lottery Fund to the General Revenue Fund of the amount of net revenues derived from the sale of lottery tickets or shares. …”
While the lottery money that went to the General Revenue Fund was used to help support schools, it wasn’t until 1985 that Illinois lawmakers passed a law specifically requiring that lottery profits go directly into the Common School Fund.
Nearly 30 years after its inception, the lottery is big business for the state, bringing in nearly $1.6 billion in sales in fiscal year 2002.
The bulk of this cash–55 percent–went to winners as prizes, according to the Illinois Lottery. Another 6 percent went to lottery ticket retailers as commissions and bonuses. And 4 percent was used for the lottery’s operating expenses, including advertising, telecommunications and salaries for Illinois Lottery administrative and support staff. The rest, 35 percent, went to the Common School Fund.
In 60619, the state’s top ZIP code in lottery sales in 2002, main thoroughfares like 79th and 87th streets are strewn with trash. Along 79th Street, insurance offices, fried fish and chicken restaurants, and beauty salons hold their own among vacant and boarded-up buildings. A small store, J&S Food Mart, at 215 E. 79th St., sports a handwritten cardboard sign that says, “THREE (3) Students at a time please!” Inside, a few rows of low shelves offer convenience foods.
The students likely come from Ruggles Elementary School, across the street at 7831 S. Prairie Ave. The school sits in a block of single-family homes, two- and three-story fiats and small apartment buildings.
The 2000 Census counted the area’s black population at 97 percent. It’s a mix of middle-class families who have lived in the neighborhood for two and three generations, and former residents of public housing developments. The unemployment rate is 14 percent, compared with 10 percent citywide. Still, the neighborhood’s adults each bought an average of $418 in lottery tickets last fiscal year.
“I understand that people are feeling like, ‘Well, I don’t have anything now. I might as well play,’ or, ‘Maybe this dollar is an investment in making me wealthy,'” said Lyle, sighing and shaking her head.
The alderman said she is “depressed but not surprised” by the level of lottery participation in her ward, which includes about half of 60619. She believes poverty, among other things, drives lottery sales.
Poor people “probably feel that the chances of them … ever achieving anything are none,” she said. “And the only possibility being offered to them is the Lotto. [And they think], ‘The only way I can ever possibly get out of here is to make it rich, and maybe this last dollar will turn me around.'”
The state’s top selling Latino-majority ZIP code area is 60639, which includes most of the Northwest Side’s Belmont Cragin neighborhood and parts of nearby Hermosa and Austin. Census data show that the area is 66 percent Latino with an average income of $13,331. Adults there bought an average of $269 in lottery tickets in 2002, according to the Reporter’s analysis. Overall, the area ranked sixth in the state, with $16.8 million in lottery sales.
Northwest Chicago’s 60634 ZIP code contains parts of the Dunning, Montclare, Belmont Cragin and Portage Park neighborhoods. The area is 74 percent white, with an average yearly income of $23,087, according to the census. Adults there spent an average of $232 on lottery tickets in 2002. It was the top selling mostly-white area in the state, with more than $13.5 million, but ranked 12th overall.
When comparing the top-selling black, white and Latino areas, not only did residents in the minority areas spend more overall on the lottery, but a greater portion of their average incomes went to pay for lottery tickets.
In fiscal year 2002, residents of the mostly black 60619 area spent twice as much of their income on lottery tickets as did those in the mostly white 60634 ZIP code area–$1.80 of every $100 earned, versus 89 cents of every $1 00–according to the Reporter’s analysis of lottery sales figures and census data. In the mostly Latino 60639 ZIP code area, residents played the lottery with $1.36 of every $100 they earned, according to the Reporter’s analysis.
But there were slightly fewer lottery vendors found in mostly black ZIP codes in fiscal year 2002, about 59 per 100,000 residents, than in mostly white or Latino ZIP codes, about 73 per 100,000 residents.
“I have only won a couple of times, enough to make me play again,” said Maria Razo, 27, a mother of three from the Lower West Side, one of the state’s highest-selling Latino areas. “I hope [the money I spend] helps people.”
Street, of the Chicago Urban League, hopes that lottery players will see how much the games take away from people and their communities.
“For urban and black community residents especially, playing the Lotto is a self-defeating behavior–a form of legalized gambling that worsens the often already difficult circumstances of their neighborhoods and the city,” he said.
“If the $23 million were handed to me, I, as the alderman, would build a community center that would provide youth programming, parenting classes and senior supportive services,” said Lyle, adding that the center would “provide holistic remedies to the problems that plague our community, i.e., dysfunctional families, youth violence, the drug culture [and] lack of mental health services.”
State Sen. Barack Obama, whose 13th District includes parts of 60619, agreed that the money could be put to better use.
“The money a family spends on the lottery could be spent on a computer for a child,” he said. “There is a need for computers in the schools, and job training and substance abuse programs.”
For now, though, the Illinois Lottery wants more money from players. It’s introducing new games to increase interest and participation, said Rayhill.
After reaching a five-year low in fiscal year 2001, the lottery saw a slight gain in fiscal year 2002.
“A couple of years ago, we started looking at a lot of our games, especially our instant games, to find ways to make them more appealing,” she said.
But even with its drive to increase sales, the lottery is not looking to target poor areas, even if they are the areas of greatest play, Rayhill said.
“I think there is a broad range of people playing,” she added. “We try to get the message out there that, if you have a discretionary dollar to spend, then play. But if you don’t have it, then don’t.”
But the Illinois Lottery has not directly advertised this message, Raybill admitted. Instead, lottery advertising contains phrases like “play responsibly.”
“The message is not intended to encourage people to spend money that they should not spend,” said Montana. “Spokes people make sure to mention that ‘the odds of winning are long’ and that ‘it only takes a dollar to play and win.'”
The state’s lottery law does not directly prohibit such targeting. But the law states that the five-member Lottery Control Board “shall establish advertising policy to ensure that advertising content and practices do not target with the intent to exploit specific groups or economic classes of people…”
But the governor-appointed board’s recommendations are not legally binding, said Rayhill. “The board is an advisory board. We work with them; we heed their advice; we listen to what they have to say.
“They might bring questions up about how we are doing something,” she said.
Yvonne Morris, 50, a graduate student and grandmother, said she has spent $15 a week on the lottery this year.
“The most I won was maybe $27 on a scratch-off,” she said. “I basically put gas in my car and bought me lunch [with the winnings]. But, if I hit it big, you’ll know about it.”
Spending More with Less
Average lottery players in mostly-black ZIP code areas spent more money
and a higher percentage of their income on the lottery in fiscal year
2002 than did average lottery players in mostly-Latino and mostly-white
ZIP code areas.
Total FY 2002 Per Capita Below Unemployment
Population Lottery Sales Income Poverty Rate
Black 651,103 $145.8 million $14,289 26.5% 17.5%
Latino 480,259 $81.0 million $12,610 21.7% 11.1%
Mixed 1,233,975 $216.9 million $19,201 19.4% 9.7%
White 512,778 $88.7 million $37,307 6.8% 4.0%
FY 2002 Lottery Spending
Per Per $100 of
Black $223.88 $1.57
Latino $168.63 $1.34
Mixed $175.78 $0.92
White $172.97 $0.46
Notes: ‘Black’ refers to all Chicago ZIP codes that were at least 70
percent black, according to the 2000 Census. ‘White’ refers to those at
least 70 percent white. ‘Latino’ refers to those at least 60 percent
Latino. All other ZIP codes were called ‘Mixed.’ ‘Per Capita Income’ was
computed by dividing the aggregate income for all ZIP codes in each
group by their total population. ‘Below Poverty’ is the percentage of
individuals in families sales per $100 of aggregate income for the
specified ZIP code areas.
Source: Illinois Lottery and U.S. Census Bureau; analyzed by The Chicago
COPYRIGHT 2002 Community Renewal Society
COPYRIGHT 2002 Gale Group