Lottery called ‘national addiction’

Monday, March 16, 1998 | 9:44 a.m.

BOSTON -- The multibillion-dollar state-run lottery industry is a "national addiction" that has tremendous social consequences for the American people, Massachusetts Attorney General Scott Harshbarger charged today.

"Lotteries are about more than money," Harshbarger told members of the National Gambling Impact Study Commission. "They are about people. And for each wonderful story of a winner, there are thousands of untold stories about losers -- stories about a lottery that separates the poor, the elderly and working families from their money with the lure of million-to-one shots."

Harshbarger, an opponent of the expansion of legalized gambling in Massachusetts, was one of several experts asked to testify today about the growing lottery industry that generated $43 billion in sales in 1996 in 37 states and Washington.

The nine-member federal panel, created by Congress to study gambling's impact on America, this week is focusing on lotteries and another industry phenomenon, gaming on Indian reservations, at its second two-day hearing outside the nation's capital.

Lotteries date to the colonial days but did not become big business in this country until 1964 when New Hampshire voters approved one. Nevada is among 13 states that do not have a lottery.

In prepared remarks to the commission, Harshbarger said a national survey recently found that the poor spend four times as much on gambling than people in high income brackets.

"More simply: The lotteries' best customers are those who can least afford to throw away their money," he said.

Harshbarger said lottery sales in Massachusetts "saturate" working-class neighborhoods.

"The cities with the highest unemployment rates, dropout rates and adult illiteracy rates are fueling the lottery's never-ending hunger for revenue," he said.

Harshbarger said the Massachusetts lottery, one of the nation's most successful after 26 years in existence, has been both a "blessing and a curse" to the state.

It has been regarded as harmless entertainment for thousands, but for thousands more it has become a "corrosive habit that plants the seeds for a serious addiction to gambling," he said.

Commission Chairwoman Kay James said the panel hopes to address several serious questions about the lottery industry.

"Lotteries are the most widespread form of gambling in the United States," James said. "They are administered and regulated by governments as monopolies, and they offer the lowest odds of winning and the highest profits."

James said the panel hopes to tackle the issue of whether states should be allowed to run and regulate lotteries at the same time.

The commission also planned to examine the marketing of lotteries to the public and what contribution lotteries make to problem gambling across the country.

The lure of lottery revenues is a compelling one to states, Doug Seay, a policy researcher for the panel, testified.

Seay said records show lotteries generated $14 billion in revenues for the states in 1996.

Questions, however, have arisen about whether the states are applying those revenues as promised to such things as education, Seay said.

Rebecca Paul, president of the North American Association of State and Provincial Lotteries, testified that lotteries have supplemented tax dollars in a wide-ranging way.

She said lotteries have raised more than $100 billion for state and community programs over the years.

In her home state of Georgia, for example, Paul said the lottery has provided scholarships to more than 97 percent of the Georgia residents attending the University of Georgia.

Paul said the Pennsylvania State Lottery has generated $10 billion toward health care, housing and prescription drugs for senior citizens.

Lottery dollars fund parks, wildlife protection in Colorado, environmental programs in Minnesota, tax relief in Wisconsin, economic development in Iowa and highways in Arizona, she said.

In Massachusetts, Paul added, the money goes back to local communities.

Paul defended the industry, saying most research indicates lotteries play a small role in overall gambling addiction in the country.

"Nevertheless, all of us in the lottery industry are aware of this problem, concerned about it and try to do as much as we can to address it," she said.

The commission was to begin delving into Indian gaming this afternoon and return to lotteries on Tuesday with more panels of experts.