The recent debate over casino gaming in the Commonwealth generated much discussion about the need for reliable revenue sources for our cities and towns. As in any controversial issue, the facts can get lost in the debate. That is surely the case with regard to the performance of our Massachusetts State Lottery Commission (MSLC).
Over the past few months, there’s been a lot of talk about the Lottery and its revenue stream. Contrary to the inaccurate claims made by a few pro-casino advocates, the Massachusetts Lottery continues to flourish and compete in the gaming industry with Fortune 500 profits.
The critics try to say our state lottery has matured and may be declining, but the facts and figures tell a much different story which bodes well for Massachusetts cities and towns. While lotteries in other states may be hitting a plateau, the Massachusetts Lottery is, in fact, having its best year ever. Gross lottery revenues are actually increasing. FY08 revenues are up 6.2% over FY07. After the first six months of FY08, the Lottery has already raised $476 million.
Our Lottery has actually never looked better and future growth is expected. Profits are now up 3% from its highest performing year. Current trends show that there is room for new growth and technology.
The Massachusetts Lottery is the most effectively run lottery in the U.S. in terms of generating government revenue. Administrative costs are less than 2% of the overall revenue. The Lottery workforce is dedicated, reliable and cost efficient and has worked hard to make the lottery the success it has become. The Massachusetts Lottery has the highest prize payouts of any other lottery in the nation. That combination sustains its viability and growth potential.
The State Lottery has been a dependable source of tax relief for over 37 years. All lottery profits, per state statute, are used for local aid and arts programs. Those dedicated local aid funds are a critical part of helping cities and towns pay for vital services.
The Massachusetts State Lottery continues to be a solid dedicated revenue source that cities and towns can benefit from now and in the future. The facts and the odds are definitely in the taxpayers’ favor.
Susana Segat,
President, SEIU Local 888
Charlestown, MA
transferring wealth from Lawrence to Carlise. Hooray.
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p>Best thing that can be said about the lottery is that it is an ignorance tax.
They know the odds. The thing is, they would rather throw away a few dollars in the off chance that they might make some real money. They might not be good at keeping track of how much they have thrown away over a month, but to them its a question of how to spend that five bucks right now, a video, a sandwich, a beer, a scratch ticket – only one of them has the possibility of making you suddenly rich.
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p>And, they know that it goes to the state if they don’t win, and supposeduly comes back to them. The wealth shouldn’t be transfered to Carlisle though, why doesn’t it return to the town it came from?
Even though residents of places like Carlisle are far less likely to spend big money on scratch tickets than people in not-so-wealthy towns.
Carlisle got 213k in 2006.
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p>The Town’s Equalized Valuation
Divided By
The Town’s Population
Equals
The Town’s Equalized Valuation per Capita
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p>The State’s Equalized Valuation Per Capita
Divided By
The Town’s Equalized Valuation Per Capita
Times
$10.00
Times
The Town’s Population
Equals
The Town’s Entitlement
What is the “town’s equalized valuation”? What’s the definition of that?
Since property values aren’t re-evaluated one the same schedule across the state, some adjustments are made to the aggregate property valuations for each community to make them comparable.
per capita is the city/towns total assessed value of commercial, industrial and residential property divided by the population.
It’s Carlisle, and if you’ve ever looked at the Chapter 70 formulas: Lawrence (90%) vs. Carlisle (12%), the lottery redistribution doesn’t seem particularly problematic.
Take a look at the comparative per capita incomes and then call it. Pay close attention to the number of kids on the federal lunch program, ESL and on special ed. No comparison there for a reason.
I agree – the lottery has been a reliable revenue source every year – cities and towns would be lost without it.
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p>Revenue projection were off and the fact thatthe lottery is havinga record year has gotten comletely lost in the casino debate. In fact the lottery is on track to raise double what the casino revenue projections were.
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p>To respond to the moderator’s comment, the difference between a casino and the lottery is the volume of money one can lose. Although it’s possible for someone to bring $1,000 and drop it on scratch tickets, that scenario is far less likely than someone dropping $1,000 in a casino. Casinos are designed for you to lose your money quickly; slot machines are designed to appeal to our senses in a way that scratch tickets cannot.
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p>And while I have seen people who are probably spending more than they should on scratch tickets, I don’t recall ever hearing of someone who lost their house because of them. But I have heard several stories of people losing their house after a trip to the casino because they gambled away their life savings.
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p>And, now you have. Doesn’t take much of a quick google search to find stories like this one that tell of large and tragic lottery losers.
If you’ve ever stopped by the White Hen Pantry for milk and waited in line behind someone who drops $200 on scratch tickets.
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p>”No, the ‘Pot o’ Gold’ one, right there below the ‘Billionaire Blockbuster.’ Yep. Six of those…”
That the lottery and Keno (the legal forms of gambling) also happen to be the games with the absolute worst odds of all — worse than even slots, and certainly far worse than table games.
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p>So we legalize the games with the worst odds and prohibit those with the best odds. Seems strange to me.
from MA citizens to national advertising corporations, ranging from the major billboard owners to radio and television companies. Due to the Massachusetts lottery, the total wealth of Massachusetts actually declines.
do you know what percentage of the intake goes to advertising and administration?
I dislike the tendency herein to try to pretend money earned or paid to corporations “leaves” the Commonwealth.
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p>This was a common argument in the casiono debate, and seems misplaced.
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p>”National advertising corporations” allow us to have, among other things, radio stations and broadcast TV. And someone earns rent on the billboards.
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p>Not that I’m a big fan of the lottery–I’m not– but this seems unfair.
Here at BMG during the casino debate much was posted about the downside of casinos…people pointed out the peripheral crime that moves in along with the games of chance (drugs and prostitution), the increased traffic, especially drunk driving traffic that changes the quality of life for “cut-through” towns, the need for environmental disruption to expand infrastructure around casinos, etc., etc….seems the lottery has provided a revenue stream for cities and towns without the attendant downside.
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p>I am sure we can all come up with a story or two about someone we’ve heard about who got caught up and carried away with lottery gambling…addictions of any kind ruin lives…however, the vast majority of people who play the lottery know the odds and take a chance for the one in a million hit…whe don’t prohibit beer because some people might become an alcoholic.
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p>Ms. Segat is right. Cities and towns are in deep trouble. Health care coverage, energy costs and pension burdens are rising for them with no end in sight. Any dedicated revenue source to off-set the situation is appreciated and needed….the lottery is just one.
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p>When the lottery started I don’t know how many years ago there was criticism that way too much of the intake was spent on advertising to promote the lottery. I think that situation was rectified. I don’t see anywhere near the number of ads for the Mass Lottery as I used to…maybe they are advertising somewhere else, but it seems less.
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Of all the anti-casino arguments, the most rediculous was that that a casino would take away from the lottery.
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p>Forget the overhead. Overhead’s small.
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p>The poorest people giving money to the lottery; money which would go to Boston; Boston would take a cut and return the balance to the Towns which would spend it on its poorest people, minus the Town’s cut.
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p>It’s a high cost reverse Robin Hood. Take from the poor; take a cut; give to the poor.
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p>Oppose casinos; oppose lottery. But to do one and not the other is total hypocrisy.
and I completely disagree with Ms. Segat. In addition, the casinos do have the value of creating jobs in the construction, hotel and restaurant industries. Most of the people I know who have visited casinos, which is just about everyone I know, usually go once or twice a year for dinner, a show and a night out with a limited gambling budget ($200 max). The lottery does nothing for them. Those are the folks that we don’t capture with the lottery.
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p>I will also add one more story to the people who have been victimized by the lottery, or by their own lack of self control, depending on your take. I worked with a guy who ran up $25,000 on his credit card in 6 months buying scratch tickets at the local corner store. He then filed for bankruptcy. If you have a gambling problem there are many other ways for you to lose your shirt.
I don’t know how you’re friend racked up 25 large on his credit card buying lottery tickets. There is a law against using credit cards for lottery purchases. Such is not the case at casinos. You can clean out your bank account at any casino and no one will question you.
The difference between lottery supporters and casino supporters, it seems to me, is where their bread is buttered: people making money off the lottery like it, people who think they’ll get money from casinos like them.
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p>The folks, however, who claim a moral superiority of one over the other make little sense, so far as I can see.
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p>Lottery supporters should have the courage to admit what they are: supporters of a geographically distributed state-run casino. Not that there’s anything wrong with that.
Before or after someone drops 3-4k on lottery tickets a year? The average person in this state spends more than $900 on lottery tickets every year, but a great many people don’t gamble at all. So, for those that do, they’re spending thousands of their dollars – and it’s a serious problem. So, maybe the Mass lottery is a more consistent source of revenue than casinos are, but there are far better ways we could be doing things in Massachusetts. Many of the people who are hit by the lottery the hardest are the ones who need that cash the most – it would be far more effective if we were making sure they weren’t wasting their excess cash in the first place, and instead providing real means for people to save their money so that one day they’ll be able to own a home, retire and maybe take that big vacation.
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p>It would be tough to do away with the state lottery, and realistically, it’s not going to happen. But pretending that this is a stable or fair source of revenue to balance our local budgets is a complete joke. If we want to take about creating a stable and fair means of doing that, then let’s talk about amending the state constitution so we can have progressive income taxation. That’s by far the fairest way to set a levy.
Score below a certain amount and have $X (what should the number be, math majors?) debited from your bank account. The lower you score, the more gets deducted. That’s basically the same principle as the current Lottery, so far as I can tell, but it has many administrative advantages compared to the current system: lower overhead, positive incentives for self-help, and so on.
You keep hitting away on the irrationality of people playing the lottery and gambling because the math is against them, but I would note that this ignores a couple things: first, that playing these games is actually fun for some people and this entertainment value is what some of what people are paying for, and secondly one might rationally decide that even though the odds are very low of winning a big prize, winning that big prize would be so life-changing that it justifies the bad odds.
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p>So it’s not just idiots who are terrible at math who gamble. There may actually be rational reasons for it.
I think three casinos was too much of a good thing, not to mention bad politics.
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p>I agree with your point about entertainment, although I submit that my math argument is also valid as a general principle.
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p>I just think the argument that there is a moral difference between the lottery and a casino is hard to maintain with a straight face.
to do away with the lottery? Otherwise, it’s apples and oranges: one is here already, and the other isn’t.
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p>And, you know what, I think the government has a place here. We’ve added things like Social Security and 401(k)s to help people be able to raise the kind of money necessary to have that life-changing scenario over the long term. Furthermore, I even get that there’s some bit of fun there… why not try to steer people into a more positive direction and try to even have it be some kind of time-consuming, yet entertaining, way to do business? For example, we could have our community colleges offer free investment classes that could teach anyone how to develope a decent portfolio for all income levels – be they middle class, working class or even wealthy. Dare I say it, at the very least those kinds of classes could be interesting if not pure entertainment, and would certainly be far more likely to end up in a “life-changing” big prize than the daily numbers.
What is your position on the cigarette tax? After all, it does seem like you could substitute cigarettes and smoking for lottery tickets and gambling throughout your post and it would be the same argument. So why should cigarette taxation be defended?
Cheaper cars are in general more dangerous cars, therefore the danger of driving, like the risks of gambling, falls relatively more heavily on poor people. We can move on to nutrition when everyone is ready.
Aren’t my cuppa tea. If you’d like to talk about the pros and cons of the state lottery, I’d be more than happy to engage in that debate, but unfortunately cigarettes and gambling have nothing to do with each other. (Besides, I’d smoke you in that argument anyway.) (And, yes, I had to add in that sentence for the pun.)
But I don’t see why it is a straw man argument. After all, one of the anti-lottery arguments is that it is essentially a regressive tax, because the people who play it tend to be lower-income, it tends to be addictive, and it tends to be life-altering in not a good way. The profits from the lottery and cigarette taxes both go to what we see as a “good cause” — education (either schools or anti-smkoing education).
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p>Yes, it’s different in that the cigarette tax is meant to discourage use and obviously the lottery is not meant to discourage gambling. But if we look at effects, the hardest hit by both the lottery and the cigarette taxes are those least able to afford it. So I see this as a proper analogy.
Here’s a pretty good explanation.
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p>
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p>Now, I was talking about casinos – which is something I’ve already said I’m quite willing to debate, any time. You brought up cigarettes, which is a completely different topic, because you saw a line of argument you could attack in that scenario. Unfortunately, that’s not the scenario I was talking about and doesn’t really belong in this thread.
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p>Now, if you want to talk cigarettes, I’m also very willing to debate you on the merits of that, but in its own place and time. Write up a diary post, presenting your argument on the merits of cigarette taxes (which, as I’ve said, is completely different than casinos), and I’m sure it’ll make for a lively discussion that I’d definitely engage in. But not in relation to casinos, because one has nothing to do with the other.
I made an analogy, not a straw man argument. I did not set up a false statement of your position. The purpose of my question was to point out that the basis of your opposition against the Lottery has practical implication for policies that are in fact quite similar in effect. If you were in a debate about gay marriage against an opponent and you brought up the question of whether s/he also believes in anti-miscegenation laws, that’s an analogy, not a “straw man”.
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p>Anyway, you don’t have to answer my question about the cigarette tax, but my asking it in this context is entirely reasonable.
Both are significant source of funds. Both are “opt-in” for the source of the revenue: people choose to buy lottery tickets and choose to buy cigarettes. The source of income to the Commonwealth from my household from the lottery and cigarrette tax is zero.
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p>Both raise revenue primarily from the poor, or at least the non-wealthy. I don’t have that much problem with either, since they are, after all, optional.
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p>But neither do I thgink that the lottery is a lovely thing; it raises revenue from primarily poorer towns, and distributes it in a way that, in my view, disfavors those very towns.
I’m curious about this number:
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p>
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p>As someone who’s not a lottery player, this seems high to me, being an “average person”, sort of.
Here’s a link that claims $13.60 per week per person for 2006.
So according to that source, it’s roughly $700 per capita, annually, for MA residents. That number excludes ‘VLT’, which is video lottery.
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p>BTW, MA easily leads the nation in per capita lottery spending , double NY’s rate.
that really could bump the number up a couple hundred dollars a year, because a lot of people spend a lot of money on things like Keno – and you can play it all over the state. Also, the number will change depending on what we include in it. Maybe the number’s around 700 for the state lottery (I did a quick calculation using the Mass Lottery’s numbers – 4.5 billion spent in ’07 divided into Mass’s 6.4 million population comes to just over 700), but my original number was from average money spent gambling by Mass residents in Mass each year, so it included the tracks, video lottery, etc.
I had a handy packet that had the factoid on it, but it didn’t make it through my spring cleaning of my couldn’t-even-walk-through-it bedroom (now I can!), but I’m sure I could get that source for you again if you really want it. But whether it’s 900 or 700, it’s a helluva lot.
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p>That said, a quick google search brings up loads of interesting information. With our population at around 6.4 million or so in Massachusetts, we have the 7th-largest lottery in the world – and that’s not per capita. Per capita, it’s the largest in the country, and probably the world (my best guess). Considering that it’s Mass residents spending their money on the lottery, being the best in this department isn’t necessarily a good thing.
wasn’t the issue for me, just trying to gauge the overall spending. The links downthread especially that spreadsheet from steve@pioneer are very good.
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p>I’m not a big lottery or casino guy, so I don’t have a feel for it, although I’m aware of the implications for municipal budgets.
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p>In a perfect world, the need for revenue from gambling (gaming!)would be negligible, but that’s not where we are. I’m not going to vent at people who are trying to put food on the table by promoting their industry. In all honesty I find it a bit depressing that with all of the brainpower and creativity in the commonwealth, we’re reduced to squabbling over the proceeds from gambling in order to meet budgets.
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p>A diversified economic base that included more manufacturing would be something that I’d rather see our collective energies directed towards, and again, that’s not the fault of someone who’s just trying to get by working for the lottery.
I miss Tribe.
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p>—-
Ticket in my hand I’m waiting
Thinking this will be the time
Imagine it will all be mine
Far away I’ll drink and dine
Spend the night in cities open all the time
My eyes will shine
All in all I can’t pretend
It would be wise to try my luck again
Deep inside I’m smiling just because I know
Uncle Sam he runs an honest show
All in all I can’t pretend
It would be wise to try my luck again
The jakpot’s up it’s up again
It towers over mortal men
And just to think that if I win
I could alter who I am
And I know that in the end
If I don’t win I’ll try again
And I feel good I’m doing my share
The profits go to Medicare
And I’ll be standing here in line
Spend my money bide my time
The jakpot’s up it’s up again
I can cash in I can still win
Every night before I go to sleep
Find a ticket, win a lottery,
Scoop the pearls up from the sea
Cash them in and buy you all the things you need.
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p>Every night before I rest my head
See those dollar bills go swirling ’round my bed.
I know they’re stolen, but I don’t feel bad.
I take that money, buy you things you never had.
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p>~ Patti Smith ~ Free Money ~
Great local band. That album was better than their second.
Someone should count the number of out of state plates that cross our borders to play the Mass. Lottery everyday instead of focusing on those Massachusett’s vehichles heading toward Conneticut. I would guess that it’s a break even proposition. It’s no wonder that most of the top Mass. Lottery sales outlets are on the CT, RI, and N.H. borders. Some border stores sell lottery tickets as their primary source of income! Massachusetts might be loosing casino revenue to CT but they’re making it back on multi state lottery players that know the best odds.
I’ve always been ambivalent about the Lottery — probably a necessary evil but getting over the top around the 40th scratch ticket.
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p>I’ve put together a spreadsheet for FY07 of how each town did on lottery aid, and what their lottery sales were. Judge for yourself about the redistribution of wealth issue.
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p>Take a look here:
http://www.pioneerinstitute.or…
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p>I threw in per capita income and population data as well.
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p>If you find any patterns of interest, I’m all ears.
It tells me
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p>1) there’s no apparent relationship between income and lottery sales in a particular town based on a couple of quick regression analyses;
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p>2) Shutesbury is a strange town. Population of 1850 people and lottery sales of $14.3 million! Is that nuts?
Shutesbury people are just downright optimistic!
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p>This whole thread veered a bit away from the original post which was not about the morality of gambling and the weakness of gamblers but rather about the revenue stream the lottery creates for cities and towns.
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p>I heard on WBZ radio news this AM that the Mass lottery was reporting increased revenue…I imagine every city mayor and town selectman in the state was thinking that was a very good news story.
There’s a fine line between optimistic and nuts. With lottery spending in excess of $7000 per person per year, Shutesbury has erased that line.
looks out of whack relative to the rest of that spreadsheet.
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p>I’m guessing that it’s an error, but maybe there is some explanation as to why it’s so high.
The Shutesbury number is a weakness of the data — it’s the sales in the outlets in the community, not exactly the sales to citizens of the community. There must be some mega-outlet there, or perhaps a major employer that’s driving sales. I’m skeptical that Shutesbury residents spend a third of their income on the Lottery. 😉
I know there are some rich people who live in Shutesbury, but the more probable explanation are travelers on/to 202 & 2. Really, there’s not that much going on in Shutesbury, though ’tis a lovely town. Give it a GoogleEarth, and you’ll see what I mean.
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p>I did notice a couple of towns out here that showed high per capita sales like Hatfield, which is located off of I95 and to/from CT to VT, and has gas stations. I suspect that this is why there appear to be high sales in some pretty small towns, like New Salem (also on that 202/2 cut through), or small towns that have the only store that sells lotto for several surrounding towns like Goshen (Rt9), or Williamsburg (Rt9) which has the only late night gas station (with an actual Dunkin’ Donuts in it) in the area.
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p>fyi, while Shutesbury has no “mega-outlets”, in our neck of the woods, a small corner store with a single gas pump and a public toilet qualifies as a mega-outlet.
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p>Fantastic spreadsheet, btw. An absolute eye-opener!
These were towns I noticed missing just off the top of my head: Chesterfield (which I think the store in town sells scratch tickets), Cummington (the Creamery), Chester (very bad in mud season), Peru (Peru may not have a store of any kind), Middlefield (the most isolated town in Mass), Heath (they have fire), Hawley (only cows), Savoy (a forest), Colrain (a nice restaurant)… anyway, I wondered how the numbers might skew if these towns received lottery money but theoretically put no money in, if they have no store or no store that sells tickets. I know Chesterfield, Cummington, Chester, Peru, Middlefield, and Colrain all have town governments, I can’t actually vouch for Heath, Hawley or Savoy. (Yes, sadly, there is still a hierarchy of sophistication, even among country rubes.)
Your knowledge of Western MA is pretty impressive. I wouldn’t have known that half of the towns you named are even in MA.
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p>For some reason, I thought that you were far from MA, maybe in Hawaii?
she was posting lots of info from Hawaii, cutting and pasting without blockquotes into her comments. A bunch of them signed off with “Aloha from Hawaii”, which stuck in my brain.
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p>There were also some Pipi insights into the local election landscape which I mistakenly took to mean that she was there. Hey, it’s the internet, and small bits of info can easily confuse me.
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p>Of course, now she’ll post that she actually was there.
and that’s Pipi “Shortstocking” (too hot for longstockings) to you.
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p>Phew, it’s 83 degrees and that darned sun keeps shining and that gentle light wind keeps drifting through the palm trees. Ah, and the mynah birds at play. Let’s just say that I am currently in the western western part of my beloved western Western Mass (TM).
wherever you’re posting from, it’s always sunny and pleasant. A small island perhaps.
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p>And now there’s a lottery game there too.
If you take your spreadsheet, and calculate the per capita, then split the population of towns into 2 groups, the population that spends MORE than the average per capita has an average town income of $29K, whereas the population that spends LESS has average income of $24K.
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p>The poorer towns subsidizing the rich. Nah, we wouldn’t want casinos eating into that government scheme.