Lottery pushes Floridians to spend more amid recession
TAMPA - Floridians give a lot to the state lottery. But the state wants more. It started selling tickets 22 years ago with the promise the money would help the schools. But as the recession cuts into state revenue, education contributions sink. They're down by about $75 million this year, to $1.21 billion, according to state analysts. The lottery's answer: Get more people to spend more money on the games of chance. The state pays millions to probe the thoughts and habits of potential lottery players. Consultants ask what they buy at convenience stores, whether they rent videos, go to theme parks, even how they feel about owning things and belonging to a group.The results show the lottery relies on the poorest and least educated - "Thrill Seeking Dreamers," it calls them - to spend more than everyone else. Floridians shelled out nearly $4 billion on lottery tickets in 2008-09, with the Thrill Seekers accounting for half of those purchases. Now, amid double-digit unemployment, the state needs new players - plus more money from the regulars. "All of our efforts at the Lottery must be directed toward improving the current sales trend," lottery officials said in a report to lawmakers late last year. They have the recommendations in hand with the opening this week of the 2010 legislative session. Lottery officials proposed an aggressive plan, including selling tickets in more places, perhaps online, in restaurants and in Walmart, and offering more intense games, possibly one that offers hourly drawings. The lottery needs to "reach people who have never played," Florida Lottery Secretary Leo DiBenigno said, partly because of the recession but mostly because the state's growth has slowed. Adjusting for inflation, the lottery's contribution to education will soon be lower than in 2002. A continued slide, the state analysts said, would cast doubt on the purpose of the game. For some, the recession only feeds doubts long held. Anthony Miyazaki of Florida International University in Miami has spent more than a decade researching lottery players. He questions whether the state should promote a practice that exploits human weakness. "How do you have high expectations for people when the government itself is promoting what is likely a false hope?" he asked. Antoinette Borges manages a business that makes a lot of money off lottery, the Alpine Liquor store on North Nebraska Avenue in Tampa. But she, too, has doubts about what she sees each day at the register, where losers far outnumber winners. "I've seen so much heartbreak," Borges said. "This game ruins a lot of people's lives. They say it's going to the schools, but I don't see the schools getting any better." Playing to win On video screens at ticket counters across the state, the lottery advertises the millions it's given to education - $20 billion since 1988. Government gets about 30 cents of every lottery dollar, with most of that going to higher education. The public schools, kindergarten through 12th grade, get about 7 of those 30 cents. Studies have questioned even that benefit, showing that as the lottery shifted money into the education budget, lawmakers shifted money out to support other programs. Either way, these numbers don't mean much to most players, the lottery's marketing studies show. People play to win, and the lottery plays to that impulse. Lottery officials were almost giddy last year when they launched multistate Powerball, with its jackpot starting at $20 million. In a memo to advertisers on how to promote the game, lottery officials described Powerball as "a game of dreams, emotional and positive that involves luck and fate ... an escape ... a thrill ride that provides an exciting rush." Officials told ticket sellers to be ready for long lines, to keep Powerball signs in high-traffic areas and to stock up on scratch-off tickets. "Impulse sales start with a customer seeing the POWERBALL logo or the current POWERBALL jackpot," said a Florida Lottery newsletter to retailers. Lottery officials pay game creators and researchers millions to monitor players' responses to new games and advertising. For about $2.4 million a year, global market researcher Ipsos Reid regularly surveys thousands of Floridians. The researchers ask hundreds of questions about the lottery games people play - where, why and how much they spend on each one. They ask about the messages they perceive from lottery ads. And they ask about their attitudes toward life, fate and gambling. The consultant breaks out the answers by gender, race, age, income and education, devoting special attention to Hispanics. The 2009 results show, for instance, that people who make more than $70,000 a year are more likely to buy a holiday-theme ticket than one with a poker or game show theme. The consultant also sorts people into six categories based on their lottery spending and attitudes. In addition to the Thrill Seeking Dreamers, there are Upscale Gamers, Conflicted Players, Indifferent Jackpot Dabblers, Concerned Followers and Prohibitionists. 'Live for the moment' The Thrill Seekers are the lifeblood of the lottery. They make up 15 percent of the adult population, but they account for 50 percent of the lottery's revenue. Most of them are women. Their income and education tend to be low or moderately low, though most have full-time jobs, and they "live for the moment," said a 2006 Ipsos Reid marketing study. Last year, about 20 percent of the Thrill Seekers surveyed said they spent more than $100 on the lottery in the most recent month. Four percent spent more than $500 in that month. Kristain Marrow, assistant manager at a Riverview 7-Eleven, knows the type. She has three customers, all women, who come in two or three times a week and spend at least $100 each time. They will buy a handful of tickets and scratch until they win something, then buy more, she said. They win a little. No jackpots that Morrow can recall. The state can count on the Thrill Seeking Dreamers, the consultant said in its 2006 study, although "responsible gaming messages are probably needed." The challenge is getting people in the other categories to up the ante. The Conflicted Players are a primary target. These are people who have concerns about gambling, though they're not against government lotteries. If the lottery advertised more about its benefits and reinforced the "fun and innocence of lottery play," Conflicted Players could become regulars, the consultant said. Ipsos Reid is one of dozens of private consultants that advise government lotteries worldwide. At a lottery convention last year in Washington, D.C., one presentation showcased an "emotionally involved brand campaign involving birds" in Washington state, according to the conference schedule. Another described how to engage younger players on the Web "by making an emotional connection ... through music." Les Bernal of Stop Predatory Gambling, based in Washington, abhors these tactics. "This isn't about people playing poker on Friday night," he said. "This is about using gambling to prey on human weakness for a profit." Florida's new scratch-off game in partnership with Bass Pro Shops is typical of the efforts to reach new markets. "Get sports fishermen into the game," Bernal said. "Get 100 of them to start buying tickets. The lotteries know that 10 or whatever number will become hard-core regulars." DiBenigno said in response that the lottery's only goal is to raise money for education and he discourages people from spending more than they can afford. "We don't want our players to overspend on the lottery. Frankly it's not good for business," he said. The lottery gives $1.1 million to the Florida Council for Compulsive Gambling, which offers hot line help and public service ads. But about 10 cents of every lottery dollar, nearly $400 million, goes to retailers, marketing and advertising companies, and a lottery staff, all devoted to one thing: selling tickets. The most from the poorest One of the consultants' latest ideas is using billboards to push people at convenience store gas pumps inside for lottery tickets. Lottery executive Tom Delacenserie e-mailed DiBenigno recently to say, "based on the (signs') impact and impulse triggers, I think we'd make back 10 fold what we'd spend." People of all incomes fall prey to these techniques, but Miyazaki said the ones who are most vulnerable are the ones with the least to spend. That bears out in Hillsborough County, where Tampa Tribune research shows that people who play the lottery the most tend to come from the ZIP codes with the lowest household incomes. At the Alpine Liquor store on North Nebraska, for instance, players have spent about $3.7 million on the lottery during the past five years. Michael Fond, 55, was one of them. He wasn't a regular player, but when he couldn't pay his property tax last year, he decided he had little to lose and put $1 down on Play 4. When he won $2,600 on Dec. 16, he was hooked, he said. "Now I play every day." He hasn't won again. Higher-income areas have their players, too, particularly the retirement community of Sun City Center. Violet Gerry, 83, said she spends $20 to $30 a day, though she doesn't keep track. She recalled winning two $500 prizes in the past couple of months. "I'm waiting for the big one," she said. But the "big one" rarely comes. Of the estimated 800 Hillsborough stores that sold lottery tickets last year, about 775 paid out less than players spent there. Of roughly 450,000 players in Hillsborough in 2009, fewer than 50 won jackpots of more than $50,000. Only 13 won more than $250,000. "You hear a lot about the winners," Miyazaki said. But the losers predominate. Still, he doesn't agree with people who call the lottery "a tax on being stupid." The games are designed to override people's common sense, especially people who don't believe they have control over their lives, he said. "It's more than the entertainment issue and it's more than just desperation," he said. "If you feel control is on the outside, then you're more likely to trust your life to fate or something else." 'Not one more dime' Reliance on lottery revenue is bad public policy, too, in the view of some experts. "It's really a negative way of trying to meet the state's financial needs," said H. Roy Kaplan, an associate professor at the University of South Florida and former vice president of the state Council on Compulsive Gambling. Studies of lottery spending, including one from the Federal Reserve Bank of St. Louis, show the money comes largely from Social Security, unemployment and other government support. Government, in other words, is paying government - with a lot of money siphoned off in the process. It's inefficient, the reserve bank writers concluded. Several states have wrestled with the question of how to mitigate the bite the lottery takes on poorer communities, said Rodney Stanley, an associate professor at Tennessee State University and a lottery researcher. Knowing these communities are the source of so much lottery money, Stanley said, Tennessee created a scholarship for low-income students. Other states, such as New Jersey, use the lottery to support social service programs. Florida launched a scholarship program, too, several years after starting its lottery. But it's the performance-based Bright Futures scholarships, which go mostly to students in higher-income areas. Facing slumping lottery revenue, lawmakers are talking about cutting Bright Futures beneficiaries by increasing scholarship requirements. Raising taxes isn't an option, Senate President Jeff Atwater has said in speeches and discussions leading up to the legislative session. Floridians have "not one more dime to send" to Tallahassee, he said. But if lottery officials have their way, Floridians will be sending more of their dimes and dollars to the state - in the form of ticket revenue. Florida needs to focus on creating "a world-class lottery," said the lottery's report to the Legislature last year, in a pitch for more advertising money. "Distractions, like debating and defending the benefit to education ... only delay the inevitably tough choices needed to enhance lottery sales."