A newspaper study found that while the Hoosier Lottery counts on lower-income players, a disproportionate share of lottery profits go to wealthy counties.
The Indianapolis Star reported in a story Sunday that lottery profits aren’t returned to Indiana counties on a per-capita basis or based on where tickets are purchased, but based on the assessed value of motor vehicles. That’s a result of a 1996 move to reduce the auto excise fee by using lottery money.
Lottery players “ought to see a return on their money in their home county,” said state Sen. Brent Waltz, R-Greenwood. “Clearly, the auto excise is not the fairest way to allocate funds.”
Counties where people spend more on lottery tickets don’t necessarily get the most money back from lottery profits, the Star reported.
For example, Marion County players spend $3.55 on lottery tickets for every dollar returned from a pool of money funded mostly by lottery profits and tracked by the State Budget Agency. Hamilton County, the state’s richest, spends only $1.19 on lottery tickets for every dollar that comes back.
Lottery players spent more than $800 million last year, but the Hoosier Lottery returns just 61 percent of sales as prizes, the newspaper said. That’s much less than other forms of legal gambling, such as slot machines, which have a return of about 90 percent.
And while owners of more expensive cars, boats and RVs benefit most from the state’s auto excise formula, it’s primarily the poor who are subsidizing them through lottery ticket sales, the newspaper said.
Experts widely agree that the poor play the lottery in disproportionate numbers, the Star reported, and a marketing survey for the Hoosier Lottery in 2005 concluded that 67 percent of lottery players have household incomes of less than $50,000, compared with 58 percent of the general population.
Hoosier Lottery Executive Director Kathryn Densborn said the lottery doesn’t deliberately market to the poor. “I do not target any demographic with our advertising or anything we do,” she said. She said her marketing surveys sort people primarily by attitudes such as “casino enthusiast,” “jackpot hopeful” and “thrill-seeking men.”
But state Sen. Michael Young, R-Indianapolis, a lottery critic, was skeptical.
“They know what they’re doing. They’re not going after millionaires. I bet they don’t run ads in Forbes magazine,” he said.
Information from: The Indianapolis Star, http://www.indystar.com
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