Poorer Areas Drawn To Lotteries, Thesis Concludes Oregon Officials Attack Student’s Methodology
A student’s study concludes what critics of state-run lotteries have contended for years: The cheap chance at a dream plays to the uneducated and poor who can least afford to lose.
Peter Balducci’s bachelor’s degree thesis will be published next month in the Northwest Journal of Business and Economics, but the Oregon Lottery isn’t waiting that long to rebut it.
Lottery spokesman David Hooper called Balducci’s methods “bogus” and cited a 1996 survey that showed no correlation between income and lottery spending.
Hooper said the study only shows that high-volume lottery dealers set up shop in low-income neighborhoods, not that residents buy tickets there. “His assumption is false,” Hooper said.
The study comes to light as lottery commissioners consider adding video slots to Oregon’s list of games, which would boost revenues an estimated 10 percent.
Balducci says adding the slots would increase the state reliance on the lottery, which he considers a regressive tax.
Balducci, a recent graduate of Lewis & Clark College, compared income data from the 1990 census with 1994 quarterly lottery sales in each Oregon ZIP code. the idea was to look who lives in areas where lottery sales are high.
He says he found that people in poorer neighborhoods spent both a higher percentage of their incomes on the lottery and spent more in absolute dollar terms.
By his findings, for every 10 percent increase in neighborhood income, lottery play declines by 7 percent.
In areas earning less than $21,879, the average household spent $52.47 a year on the lottery. In neighborhoods earning more than $39,739 average spending was $33.49.
Hooper said people often leave their neighborhoods to play video poker at taverns or buy lottery tickets while working far from where they live.
For example, he said, the biggest seller of the lottery’s Breakopen games is a truck stop in north Portland. the demographics of the area bear no relationship to the truckers who buy tickets there, Hooper said.
Balducci’s study determined that low-income players favor pull-tab and scratch-off games that give instant results.
He says he acknowledges problems in his thesis but says studies in other states bolster his results.