That is according to a new study NC Policy Watch, which found that poorer counties are the biggest per-capita spenders on the N.C. Education Lottery.
The study found that Scotland County adults spend an average of $222.04 a year on lottery tickets.
All total, that was about $6 million spent on lottery tickets in a county with one of the highest unemployment rates in the state.
According to the study, 18 out of 20 counties with poverty rates higher than 20 percent had lottery sales topping the statewide average of $200 per adult.
“What research does indicate is that far more lower-income families perceive lotteries as a way out of poverty and as a way of hitting the jackpot,” said John Bowman, a sociology professor at The University of North Carolina at Pembroke. “There is a mistaken belief that this will solve their economic woes. It’s an erroneous assumption because the odds are very small of that happening.”
The highest per-capita ticket sales were in Nash County, with $536.11, and the lowest were in Madison County, at $41.48. During the 2009-2010 fiscal year, the state sold $1.4 billion worth of scratch tickets and number games, according to NC Policy Watch. The study showed that per capita sales were the lowest in the western part of the state and highest in the eastern part of North Carolina.
“For higher income people who have access to retirement accounts and 401k programs, that’s where they place their hope in terms of their retirements,” Bowman said. “Some lower income people don’t have bank accounts, and there’s a lack off opportunity to have financial stability. Research does show that a higher percent of low-income people see the lottery as a way of financial stability.”
Most scratch-off tickets can be purchased for a dollar or two, with prizes reaching into the tens of thousands of dollars. But the odds of winning, which are listed on the ticket, are long.
“There is evidence that convenience stores do a ... successful job of marketing and selling tickets,” Bowman said. “One of the questions raised is, is it likely that poorer areas have more convenience stores and I think that answer is yes. There are more stores here in Robeson County, because people predominately do their shopping at those stores. You could argue that these stores are targeted for lottery sales.”
For the report, The NC Policy Watch took the total amount of dollars spent on the lottery in a county and then divided that figure by the number of adults in the county. NC Policy Watch then compared those figures with the U.S. Census 2008 poverty rates.
“It’s interesting that this report is coming out of the NC Policy Watch, which is a project of the North Carolina Justice Center and it’s an anti-poverty project,” Bowman said. “If people spend a greater wealth of their income on lottery tickets it can represent a regressive tax on the poor and I think part of their motivation is to bring public attention to this whole issue.”
The North Carolina Education Lottery was established to generate a new revenue stream for education. During the 2009-2010 fiscal year, it netted $400.9 million in profit.
“The reality is that since 2005, about a billion dollars have been added to the state’s educational program, which is a benefit, but what we’re not so sure about is the social costs of a lottery and that’s far more difficult to assess,” Bowman said. “Given the current budget shortfalls in North Carolina, this lottery isn’t likely to disappear anytime soon because it’s a popular revenue source. This past summer the legislature took $35 million lottery-generated funds and moved it to Medicaid funding, so now the state isn’t just using those funds for educational programs, but to fill in other loopholes in the state budget.”
Rob Schoffield, director of research for the NC Policy Watch, said lottery tickets are not a good way to fund state government.
“The NC Policy Watch has long expressed concern about the fact that in order to make the lottery work, money is constantly put into it to advertise,” he said. “It’s almost predatory and it’s pretty clear the lottery goes to great lengths to keep people’s interest over time. It’s generally an unsavory practice.”
Schoffield said the findings from the report show that the lottery is a regressive tax.
“This confirms what we’ve long suspected about the lottery and that it funds the government in a way that takes a disproportionate share from people of low to modest income,” he said. “It’s like a sales tax or an excise tax, and it takes more from people at the bottom than at the top.”