An addiction that states encourage
Lotteries depend on the poor and gambling addicts for most of their revenues, said journalist Bryce Covert in Topic.com. But 44 states still actively promote them as the fastest way to realize the American dream.
Adam Osmond lived and lost the American dream by gambling on lottery tickets that often promise to take players from rags to riches.
In 1984, at the age of 17, Osmond came to the United States from Somalia to attend Central Connecticut State University, a college in New Britain, Conn. While in school, he worked at a local convenience store part-time, eventually moving up to store manager. Back then, scratch-off lottery tickets in the state typically cost $1, so Osmond would play them at work every so often for fun. “I’m always into numbers,” says Osmond, who liked playing tickets that let him select different combinations of digits.
After graduating from college, Osmond became an accountant for the state government, but he also wanted to pursue being a business owner on the side. He bought his first convenience store in 1998, the same year his first daughter was born, and later acquired a gas station with a store, both located near his alma mater in the snowy, quiet New England town.
Osmond is clearly a businessman. He comes to our meeting at a Dunkin Donuts, not far from his former stores, dressed in a blue-and-white-striped collared shirt with French cuffs, gray slacks, and brown dress shoes, holding a legal pad in a leather case. His dark hair, showing some signs of graying, is close-cropped, and the walnut skin of his face is cleanly shaven. It was when he owned his own businesses that his lottery playing changed and, eventually, became a problem. By the late 1990s, when he had already bought his first store, the price of tickets was going up: Scratch-offs could go for $10 or even $30, with the lure of bigger winnings. After he bought the second store, in 2002, Osmond started playing more, purchasing tickets at his own stores. “The more I play, the more [I wondered], ‘What if I win?’” he recalls.
In 2004, Osmond won $3,800, which was then his highest jackpot ever. After that, “it got really bad,” he says. He began playing almost daily. He switched to different kinds of tickets, called Play 3 and Play 4, which let a player pick a set of numbers. The drawings were twice a day instead of daily or weekly, giving him instant gratification. The immediacy with which the games concluded, and the big payouts that could follow, only made things worse. “The worst thing that happens to any gambler is when you hit something big,” Osmond explains. “Whatever I win, I would play more.” In 2007, Osmond won two $25,000 payouts; he had plowed those winnings back into new tickets within a week. Soon, he started pouring all of his money—his entire income, plus any money he won playing the lottery—into lottery tickets. “Every penny that I won and every penny that I earned was going to it,” he says. Eventually, he was gambling over $20,000 a week, playing “nonstop.”
It wasn’t about the fun of playing numbers like his daughter’s birthday or his anniversary date. “It’s not even about the money,” he adds. “It’s about being in the action…. It makes you high.” Losing made Osmond want to play more, to achieve the next win. Each time he won, his mind would tell him, ‘You could win more. Why stop now?’ And, of course, his businesses gave him instant access to more tickets.
“It’s like an alcoholic owning a bar,” Osmond says. “I [owned] my own little casino.”
Today all but six states—Alabama, Alaska, Hawaii, Mississippi, Nevada, and Utah—run a lottery. Once they realized lotteries could be a source of revenue, growth exploded during the economic upheaval of the 1980s.
A 2017 University of Massachusetts study found that nearly two-thirds of Massachusetts adults play the lottery in a typical year, but for people with gambling addictions, the numbers are much higher: About 95 percent of problem gamblers play it. (Overall, between 83,152 and 135,122 adult residents are problem gamblers, and between 389,776 and 488,519 adult residents are at-risk gamblers.) These frequent—some compulsive—players are where the real state money lies. “The casual player that might jump in when the Powerball is big—they’re irrelevant to the revenue model,” says Les Bernal, national director of the nonprofit Stop Predatory Gambling, adding that state lotteries “make their money on the highly repetitive games.” Such “core” players are only about 10 to 15 percent of all people who play the lottery, but account for 80 percent of sales.
“A lot of my customers had the same problems,” Osmond says. “A small percentage of people [were] responsible for all the sales.” That group, he explains, would come in every morning, buy tickets, then return to buy more at lunch—“and I was the biggest one.”
By 2005, Osmond knew he had a problem, but he kept his addiction a secret from his wife and children. “No one knew anything about it,” he says. The only people aware of his issue were officials at the Connecticut Lottery, who met with him in February 2008 after his stores’ high sales and payouts raised concerns. They asked if he had a lottery addiction, but he told them no, not wanting to admit that there might be a problem. They let him continue running the lottery out of his stores. “As long as I was paying them every week, they were very happy,” he says. After all, Osmond’s stores were the biggest source of lottery sales in his entire region.
By the summer of 2008, he says, his addiction “affected everything” in his life. At that point, Osmond’s health had started to decline, and he wasn’t eating well or taking care of his businesses. His stores’ sales floundered. It wasn’t until six months after the first meeting with Connecticut Lottery that the state stepped in and cut off his machines. He had started printing tens of thousands of tickets without cashing any of the winning ones. “I just wanted to get caught, and I wanted them to shut down the machine,” he explains.
State governments that rely on lotteries for revenue have a clear goal: increase the money they make off the cut they take from each game played. Achieving this goal often means getting more people to play or extracting larger sums of money from dedicated fans. “An enormous amount of their profits comes from people who are addicted,” Bernal says.
The perverse incentive for states to maximize gambling profits is the opposite of what people expect from their government—which is tasked, at least in part, with protecting public health and discouraging addiction. Yet states are generally making problems worse, not better. Traditional lottery games involve long intervals between the time people place bets and when they discover whether or not they’ve won. When people fill out a Powerball or Mega Millions ticket, they have to wait a few days to realize any wins.
But, according to Bernal, though they often get the most press—with Mega Millions jackpots in the hundreds of millions making regular appearances in newspapers and on the nightly news—these kinds of games aren’t the “primary source” of most lottery addictions. Instead, states have expanded into games that offer instant rewards.
To get more money from scratch tickets, states like Texas have made individual ticket prices higher while increasing the rates of payout; some tickets cost as much as $50 each. “We call it ‘juicing the ticket,’” Bernal says. This plays directly into the kinds of things that are associated with gambling addiction: speed of play, instant reward, and large jackpots.
A higher payout sounds like a good deal until it becomes clear that the most frequent players, like Osmond, simply put winnings back into buying more scratch-offs. “Gambling can act like a narcotic,” explains Keith Whyte, executive director of the National Council on Problem Gambling, which advocates for services to help people with gambling addictions. “Many gambling addicts develop tolerance: You need to bet more and more money to achieve that same high.” So they keep betting more and more money, including the proceeds from their wins, to get that rush. Others chase their losses, funneling wins into plays in an effort to make back all the money they’ve lost.
“I’ve had some lottery addicts in particular describe a big win as depressing or infuriating,” Whyte says. “They only walk away when they don’t have any more money to play. A big win just means they stay there longer.”
Now states are pushing into online and app-based games. These new games typically require legislative approval, but it’s already happening in some places like Michigan, which offers online games on the state lottery website that are essentially virtual scratch-offs. This includes Wizard of All, which is designed to look like Harry Potter, and Gem Blaster, which looks like Candy Crush. “Younger people aren’t [playing] lottery games, which is why they’re pushing to bring it online,” Bernal explains. “They put Las Vegas on Main Street, now they’re trying to bring Las Vegas into every home, every office…right into your living room.”
Scratch-off games offer lottery addicts instant gratification.
Lotteries are often established when the economy is suffering and state governments cast about for sources of revenue. Officials usually sell the public on starting or expanding lotteries by saying that the money will be earmarked for important public goods—most commonly education, but also other services like mass transit or environmental conservation.
On top of the harm brought to families like Osmond’s, those promises are a bad bill of goods. Across all states and localities, lotteries brought in just $17.7 billion in 2015, according to an analysis by Urban-Brookings researcher Lucy Dadayan. That may sound like a lot of money, but in 2017, states’ total revenues came to over $2.5 trillion. Lottery revenues also don’t grow much over time. In 2008, they were $17.4 billion, adjusted for inflation, meaning they grew less than half a billion dollars over the span of nearly a decade. (Revenues actually fell in 21 states.) Even as the number of states with lotteries has steadily increased since 1979, the real growth rate in lottery revenues has fallen.
Part of the reason lottery revenues don’t increase is that states get a set amount from each game played, and the number of people playing doesn’t tend to increase year after year; it’s a fixed number of people, and a fixed pot of money. “At the end of the day, we know that revenues from the lottery are not budget solvers,” Dadayan says.
Meanwhile, reams of research have found that the poorest Americans spend the biggest shares of their incomes on the lottery, including the industry’s own internal research. And research by the business school of Carnegie Mellon has also found that most of these players aren’t doing it for fun, but out of a desire to improve their finances. The higher the poverty rate, the higher the lottery sales—a relationship that doesn’t exist for other forms of entertainment, such as movie tickets.
Lotteries “have come to represent, for millions of Americans, the best way to change their lives,” Bernal says. “This has come to represent the American dream.”
States spend next to nothing on actually helping addicts. Yet compulsive gambling comes with a cost, one that few states factor in when they think about their lotteries. There is, of course, the cost in lost money, or even loss of life for an addict and his family. But there are also societal costs. Whyte’s organization estimates that those with the most severe gambling addictions each cost a state $1,700 a year through the criminal justice and health-care systems.
Although he went into treatment and hasn’t gambled for nearly 11 years, Adam Osmond eventually lost both his house and the two stores that fueled his addiction. But the stores still sell plenty of lottery tickets. Plastered to the windows of his former gas station are signs boasting of the sale of tickets that won their purchasers anywhere from $1,000 to $100,000. A Connecticut lottery sign, showcasing a dancing figure with dollar bills raining down over its head, is still screwed to the brick wall of the old convenience store.
Excerpted from an article that originally appeared in Topic.com. Reprinted with permission. ■