The gambling scam on America's poor

What kind of government spends millions of taxpayer dollars peddling false hope to confiscate cash from its poorest citizens to fatten state coffers?

from the May 2, 2007 edition

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On the surface, that appears to represent only a $475 annual loss per player. But industry executives will tell you that 85 percent of their revenue comes from 20 percent of the players. So I called a Massachusetts state legislator's office that is fighting the introduction of casinos in the state to help me with the math.

"For the state to make its $350 million on slots after payouts," an aide told me, "147,000 gamblers – about 3 percent of the entire adult population – have to lose a total of $496 million. That's an average annual loss of $3,374 apiece." Incredible, perhaps, until you've seen the transfixed expression on the face of a "player" at one of these machines.

Adding slots to Massachusetts' revenue mix is equal to raising taxes on the average player by 62 percent. Legislators wouldn't try that with the folks at home, but it's easy when pitched as entertainment.

Of the many ways government can raise money, gambling is the worst. It's regressive. And it can ruin lives.

To be sure, most states gain political support for their lotteries by earmarking them for appealing causes such as education, schools, roads, and parks. But there is no practical way to prevent a legislature from allocating these revenues to other reelection-prompting purposes – and most do.

Anyone comforted by the idea that gambling is voluntary should spend a day with the casino staffs that segment local markets, track prospects' and players' observed worth, define their predicted value, and systematically maximize individual "share of wallet" through targeted and customized promotional messages, limited-time cash offers, and carefully tracked time-to-response and spending analysis.

This is highly sophisticated and systematic coercion – and it works. At casinos such as Pechanga in Los Angeles, demand for drive-in slots has become so great that the parking lot is jammed on weekdays and two-hour lines often form on the weekends. State lotteries are among the largest buyers of radio advertising in their metro markets. What kind of government spends millions of taxpayer dollars peddling false hope to confiscate cash from its poorest citizens to fatten state coffers? The same government that spends more taxpayer money on ads offering help for addicted gamblers.

In the next election, consider asking your state legislators whether their mandate is to serve or to swindle the people. No government should be running soak-the-weak scams.

Mark Lange is a former presidential speechwriter.

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