News and Features: Features
Hitting the Jackpot
April 01, 2005
Hitting the Jackpot
Even if it’s only the lottery, the state is hooked on gambling. Is there more to come?
By Michael Jonas
Photographs By Mark Morelli
It’s a safe bet that Al Rezendes isn’t giving a lot of thought to the Belchertown fire truck he helped buy, or to the new police cruiser protecting the residents of Bellingham, thanks in part to him. Standing in Sully’s variety store on Broadway in Chelsea, the 54-year-old retired cleaning business worker is more focused on why the keno drawings keep favoring high numbers when he consistently plays two different strings of low numbers. Or on how the $50 worth of scratch tickets he has bought over a half-hour span have returned a paltry $9. “The lottery ought to be shot,” he says, though Rezendes will almost surely return the next day to Sully’s, where he drops as much as $100 per day on the state-run games that critics call a “sucker’s bet” and a hidden tax on the poor.
It may bring disappointment and sometimes despair to legions of losers, but the Massachusetts state lottery is a cash cow for government. The lottery pours nearly $1 billion a year into the state’s coffers, accounting for more than 3 percent of all state revenue. With most of that money earmarked for local aid to cities and towns, the lottery has become an indispensable revenue pipeline for communities across the state, giving it a built-in constituency that includes leaders of every municipality in Massachusetts.
In Chelsea, $5 million of the city’s $97 million yearly budget comes from lottery aid. Jay Ash, Chelsea’s city manager and a lifelong resident of the blue-collar burg of 35,000, voices misgivings about the amount of money denizens of his city—one of the poorest in the state—wager on the games. But he is equally clear about how dependent Chelsea is on lottery aid. “We couldn’t survive without it,” says Ash.
It may strike some as an odd way to fund state and local services, but the 34-year-old state lottery is now accepted as a permanent part of the Massachusetts landscape—and revenue system. It is the most successful in the country by far, pumping more money per capita into state coffers than any other lottery, while racking up gross sales that exceed lotteries in every state except New York. (See State of the States, page 34.) But the trade in scratch tickets and keno—the bingo-like game for which numbers are drawn and displayed every four minutes on television monitors in barrooms and convenience stores across the state—is rapidly becoming passé.
Full-blown casinos and slot machine emporiums, once limited to the neon-soaked Nevada desert, are popping up everywhere from downtown Detroit to sturdy Middle America outposts like Rock Island, Ill., not to mention the Connecticut countryside. Following the spread of state lotteries in the 1970s and ’80s, states are now welcoming the bells, whistles, and lights—and loot—of big-time gambling. On top of the 41 states plus the District of Columbia that operate lotteries, 33 now have some type of casino gambling or slot machines. Only Hawaii and Utah have no forms of state-sanctioned gambling.
Alan Wolfe, director of the Boisi Center for Religion and American Public Life at Boston College, says that while the country has long looked to the West Coast for signs of things to come, we seem to have a new trend-setting touchstone. “We used to talk about how the whole country is California, but now the whole country is Las Vegas,” says Wolfe, the author of, among other works, Moral Freedom: The Search for Virtue in a World of Choice.
Younger people today “have grown up in a culture where the lottery and the weather is what you hear every night on the news,” says Kathleen Scanlan, executive director of the Massachusetts Council on Compulsive Gambling. “It’s all becoming normalized.”
Maybe so. But for years, Massachusetts has resisted, through good times and bad, the push to expand gaming past its current legal limits. Still, the pressure has not gone away. That’s in part because of the hundreds of millions of dollars that pour out of the state each year as residents flock to Foxwoods and Mohegan Sun, the huge casinos operated by American Indian tribes in southeastern Connecticut.
So far, Massachusetts has elected not to roll the dice on expanded gaming, but it’s hardly because the state with the country’s leading lottery claims any kind of moral high ground when it comes to leveraging games of chance to fund vital state services. Indeed, worries from lottery officials that casinos or slot machines might eat into the earnings they return to cities and towns have been among the strongest anti-casino arguments used in the running debate over gaming, a world in which strange bedfellows are often the norm.
From the poker fad that has teenagers following their favorite card sharks on televised tournaments to the buses that disgorge thousands of senior citizens each day at Foxwoods, we seem to be a culture crazed by games of chance. Critics say we are driven by a something-for-nothing ethic that appeals to a hunger for instant gratification and shuns the connection between purposeful effort and its psychic, as well as material, rewards. Nowhere is that mindset more powerfully driving the spread of gambling than in state capitals, where the lure of gaming revenues is proving irresistible to legislators. “It’s a third choice from the Hobson’s choice of raising taxes or cutting programs,” says state Rep. Daniel Bosley.
City manager Jay Ash: Chelsea
"couldn't survive" without lottery aid.
Bosley has spent a decade in the thick of the debate over expanded gambling in Massachusetts. As the longtime House chairman of the Legislature’s committee with jurisdiction over gambling, the North Adams Democrat has been one of Beacon Hill’s point men on gaming bills. To Bosley, who has studied the issue as much as anyone in the Legislature, the case for casinos just doesn’t add up.
But there is plenty of support for expanded gambling in the Legislature, and some think the prospects have improved with the departure of former House Speaker Tom Finneran, who was a firm opponent of the idea. One of those hoping the tide has turned is state Sen. Joan Menard, a Democrat from Somerset, who is the sponsor of one of the main expanded gaming bills filed this year. Menard’s bill would permit the placement of slot machines at the state’s four existing racetracks while also authorizing the establishment of two full-scale casinos, one in her home region of southeast Massachusetts and one in the western part of the state, both economically struggling areas where local officials have long argued for casinos as part of a revitalization plan.
“We’re just allowing a lot of revenue to leave the state,” says Menard, offering up one of the most common arguments made for expanded gambling here. A recent study from the Center for Policy Analysis at the University of Massachusetts at Dartmouth says that Bay State residents spent $831.5 million last year at Connecticut’s two casinos, which translates into an indirect contribution to that state’s coffers of $116.6 million. According to the report, Massachusetts residents also spent an estimated $179.9 million at Rhode Island’s two slot machine venues, the Lincoln Park Greyhound Track and Newport Grand jai alai and racing simulcast center.
“It’s the only bill that we will pass in our legislative careers that will not cost the Commonwealth any tax dollars that will create jobs instantly,” says Senate minority leader Brian Lees, an East Longmeadow Republican who represents part of Springfield, which would be a likely candidate for a casino under Menard’s bill. “I can’t think of anything else that could create 5,000 to 6,000 jobs within two years,” says Lees.
Bosley says the gambling industry and its legislative allies overstate the benefits of expanded gaming while ignoring the costs. Two years ago, he says, owners of the state’s four racetracks claimed that allowing slot machines there would generate more than $400 million in revenue for the state, a figure he calls “patently absurd” given that Foxwoods and Mohegan Sun, the world’s first and third largest casinos, respectively, returned a total of $397 million to the state of Connecticut last year. But even accepting that figure, Bosley says, an honest accounting would include likely reductions in lottery revenue, law enforcement and regulatory costs, and the social and economic costs of compulsive gambling.
Bay State residents spent $831.5 million last year at Connecticut's two casinos, says one study.
Says Bosley, “Our answer has come down very solidly after examining this half a dozen times: This is not good state policy.”
Those who study the economics of the gambling in-dustry say it’s not always that simple. William Eadington holds the Philip S. Satre chair on gaming studies at the University of Nevada at Las Vegas—a post named for the former CEO of Harrah’s Entertainment, the country’s largest casino-operating company, which donated $1 million to endow the professorship. Eadington says there is a hierarchy of economic effects associated with gambling. At the top are destination resorts such as Las Vegas, which draw visitors from across the country and even from around the world. These are clear generators of economic growth to the local community. Casinos like Foxwoods, which have a regional draw, offer substantial but somewhat lower returns to the local economy, while slot machines—or video lottery terminals, as they are technically known in the industry—based at racetracks are the least beneficial, creating far fewer jobs than full casinos and drawing most of their revenue from customers in the immediate area. Coming late to the game, Massachusetts is unlikely to create a destination casino of any kind, Eadington says. “That’s not going to happen.”
“Gambling is successful in a state when you can get lots of people from out of state to come in and do it,” says Richard McGowan, a Jesuit priest and associate professor in Boston College’s Carroll School of Management, who studies the effects of lotteries and other forms of legalized gambling. That’s because the state gets money from gamblers who take any social costs associated with their practice back to their home states. “The point has not been lost even on our Muslim brothers and sisters,” says McGowan, pointing to Egypt’s booming tourist casinos—from which its own citizens are banned.
When it comes to gambling facilities without such a dispersed clientele, success is not so evident. The Rappaport Institute for Greater Boston at Harvard recently completed a national study of the economic impact of American Indian casinos. “We didn’t find particularly dramatic effects in either direction,” says Phineas Baxandall, assistant director of the center. The study found a 10 to 15 percent increase in bankruptcies in counties with casinos compared with similar counties without such facilities. On the positive side, the arrival of casinos did lead to local job growth, but that came with a growth in population, so that the “employment rate didn’t necessarily go up,” says Baxandall. Of course, in economically troubled areas, such as Springfield, which have experienced population loss and economic decline, more jobs and more residents would both be welcome.
If the debate over the economic impact of gambling expansion is complicated, state Sen. Michael Morrissey, who in the past served as Bosley’s Senate committee co-chairman, says sizing up the appetite for gaming legislation on Beacon Hill is not. “Depending on how desperate we are for new revenue sources, it will receive attention accordingly,” says Morrissey, a Quincy Democrat who has authored several bills to expand gaming.
Two years ago, in the midst of a recession and fiscal crisis, gambling was receiving serious attention on Beacon Hill. Gov. Mitt Romney first raised the idea of seeking payments from Connecticut’s casinos and Rhode Island’s two slot machine venues as part of an agreement by Massachusetts not to open casinos here. The “blocking payment” plan—likened to extortion by some—didn’t get off the ground. That was followed by talk from the administration of granting temporary, five-year licenses to operate slot facilities in Massachusetts. The idea that the state would ever shut down a revenue-generating operation once it was established struck many as disingenuous, and the plan didn’t fly.
Rep. Daniel Bosley says casino backers
overstate benefits and ignore costs.
Sending a sharp signal that gambling was off the table, the House voted down two different bills to expand gambling prior to that year’s budget debate, ruling out a gaming solution to fiscal woes. After that, no gambling measures ever came to a vote in the Senate.
Today, the Romney administration says there is no need for gaming revenue. Spokesman Shawn Feddeman says that while the administration “considered an expansion of gaming when we were grappling with a $3 billion budget deficit,” with state finances now on a more even keel, “there is no need for the additional revenue that gaming would bring in.”
For gambling interests, opportunity often lies in the prospect of fiscal calamity.
Last year, with a decision on the Hancock school funding case looming on the horizon —possibly requiring the state to spend hundreds of millions of dollars on schools in low-income communities—there was once again quiet talk of a casino solution. But the wind came out of those sails when the Supreme Judicial Court ruled against the Hancock plaintiffs in February.
Sen. Sue Tucker, the Legislature’s most vociferous gambling opponent, says she finds it particularly galling when gambling proposals come wrapped in the mantle of worthy causes. “I sincerely object to the ‘slots for tots’ approach,” says the Andover Democrat. “Why doesn’t the state push smoking so the resulting higher cigarette tax collection can fund important services?”
Gambling proponents have also hitched some hope to the election two years ago of Robert Travaglini as president of the state Senate. Two of the state’s four racetracks, Suffolk Downs and Wonderland, are located in Travaglini’s East Boston–based district. The Senate president says he would support a move to allow slot machines at racetracks as a means of creating new jobs as well as preserving the close to 3,000 jobs now at the two facilities, which have struggled in recent years in the face of declining attendance.
But Travaglini has thus far not seemed anxious to make gaming expansion a signature issue of his tenure. “It’s clear to me that the votes aren’t here in the body,” he says of the Senate. Asked about the prospects for passage of expanded gaming legislation this year, he says, “I would hold your bets.”
Bosley, who has retained jurisdiction over gaming bills as House chairman of the new Joint Committee on Economic Development and Emerging Technologies (itself taken by many as a sign that the new House leadership, under Speaker Sal DiMasi, has no greater appetite for gambling), has no doubt, however, that there will be proposals for slots, casinos, and the like in the future. With hundreds of millions of dollars at stake, he says, the industry push for expansion is relentless. Bosley tells this story: One year, the Legislature voted down a gaming bill on a Monday or Tuesday, then, “on Thursday one of the gambling interests came in to see me and says, ‘How can we change your mind,’” he says. “It’s like Freddy Krueger. It keeps showing up no matter how many movies it dies at the end of.”
Wearing a black turtleneck and sport coat amid a roomful of dark-suited Boston business types, Gary Loveman looks every bit the Las Vegas executive he is. But as the guest speaker for Boston College’s Chief Executives’ Club of Boston on a Tuesday in January, the 44-year-old chief executive of Harrah’s Entertainment is actually quite at home. Loveman, who divides time between his suburban Boston residence and the company’s Las Vegas headquarters, spent nine years as a Harvard Business School professor before trading in his academic post.
Whether holding court before a classroom of future corporate leaders or fronting for the country’s $72 billion-a-year gambling industry, Loveman talks at the rat-a-tat speed of a polished pitchman, describing the glories of his industry with over-the-top overtures that leave the crowd laughing, if not necessarily won over.
He touts the economic renaissance casinos have brought to cities across America, from the down-on-their-luck Iowa and Illinois outposts that have welcomed riverboat gambling to the country’s capital of fun, New Orleans, where letting the good times roll now includes rolling the dice at four different casinos. He jokes that the Joliet, Ill., of today, with a 40,000-square-foot Harrah’s casino, is a far cry from the bleak backwater captured in the Blues Brothers film, where the best hope for locals was a job at the city’s famed state prison. Joliet has been “totally revitalized,” Loveman tells the room of executives at the Boston Harbor Hotel.
Though he concedes that the short-term prospects for a Massachusetts casino aren’t terribly good, he says Harrah’s is more than ready to bring the benefits of casino betting to the Bay State. “My humble company would be honored to serve,” he says.
Dan Bosley paid a visit to Joliet in the mid-1990s, part of a fact-finding trip he took to various gaming sites. But it’s not the revitalized downtown and sparkling riverboat casino that stick in his mind. Bosley was struck by the stories he heard on Joliet’s floating riverside casinos, including one from a young man from the area who was just out of high school. “He had lost $1,000 in the past week and was trying to get it back,” says Bosley. “I heard that story many times.”
Not nearly as many times, however, as Kathleen Scanlan. Scanlan is executive director of the Massachusetts Council on Compulsive Gambling, a 22-year-old organization providing help to compulsive gamblers, which is funded by the state lottery commission.
The group gets 2,000 to 3,000 calls per year to its hotline. The prevalence of problem gambling is difficult to gauge precisely, but most estimates say 1 to 2 percent of the adult population suffer from extreme forms of pathological gambling, while an additional 3 or 4 percent of all adults have gambling problems severe enough to cause harmful effects on their daily life.
Scanlan says compulsive gambling can exact a wearying toll, ranging from its effects on marriages and relationships with children and parents to financial ruin and even criminal behavior. “We very often will find a person gets involved in illegal activities not because they’re a person who has been living a criminal existence, but because a person with a gambling problem will do what they have to do to keep gambling,” says Scanlan.
Take “David,” for example, who has seen his marriage crumble, his career go down the tube, and bankruptcy leave him with nothing. These days, the 41-year-old father of two, who spoke on the condition that his real name not be used, is volunteering at the problem-gambling council’s Boston office and waiting for sentencing on federal charges related to embezzling money from his former employer.
In the mid-’90s, David’s wife nearly threw him out when gambling forced the family into bankruptcy in Florida. But she gave him another chance when they resettled in the Boston area. Within several years, he was making close to $100,000 a year in construction management and had built a house in the suburbs. But gambling once again overtook his life, as he spent more and more non-work time at Foxwoods. In 2000, he says, “my wife kicked me out for the third time.”
When she did, he had only one place to go. “I moved out and I moved to Foxwoods,” he says, and he means it quite literally. The customer points he racked up at Foxwoods—under a system similar to airline frequent flyer miles—enabled him to live in a suite in one of the casino hotels for the better part of three years. “I don’t think I once paid for a room,” he says. He commuted two hours each way to his job, pumping everything from his now $150,000-a-year salary that didn’t go to child support into games of chance.
David has attended Gamblers Anonymous meetings ever since he was arrested early last year. And in the spirit of all such addiction recovery programs, he emphasizes that he is ultimately the one responsible for his actions—and for his own recovery. Still, he finds it hard to view the casino industry as an innocent bystander to the damage wrought in their facilities. He says casino staff and management never once questioned his gambling habits.
“How could I live there day after day and gamble hundreds of thousands of dollars and not have someone come up and say, ‘Do you have a problem?’ Never, not once” did that happen, he says. Casinos don’t try to help compulsive gamblers “because it’s not in their best interests. You don’t have to be a brain surgeon to understand that.”
GAMBLING WITH ADDICTION
“The industry is well aware their Achilles’ heel is addiction,” says McGowan, the BC gaming researcher. Unlike the tobacco industry, which denied the addictive properties of cigarettes for decades, the gambling industry has sought to get out in front of the addiction issue, readily conceding that the problem exists—though it is also quick to emphasize that compulsive gambling is confined to a tiny proportion of the population, McGowan says.
Recognition of problem gambling, however, has raised some thorny questions for the industry, chief among them: Does the spread of legalized gambling lead to more problem gamblers?
Sen. Joan Menard: "We're just allowing
a lot of revenue to leave the state."
“You’re an ostrich if you think that adding a casino is going to have zero impact,” says Henry Lesieur, a psychologist who directs the Rhode Island Gambling Treatment Program at Rhode Island Hospital, in Providence. “I have far too many people tell me, ‘Before Lincoln Park opened, I didn’t have a problem. Before Foxwoods opened, I didn’t have a problem.’”
The report of a 1999 national commission on gambling seems to confirm Lesieur’s experience, concluding that living in a 50-mile radius of a gaming facility was associated with twice the prevalence of problem gambling as in areas not close to such facilities.
Christine Reilly, executive director of the Institute for Research on Pathological Gambling and Related Disorders at Harvard Medical School, says the question isn’t that simple. She says the 1999 study was “very methodologically flawed.” Furthermore, she says, there is growing evidence that there may be a “novelty effect,” in which the introduction of casinos leads to a short-term bump in problem gambling that then flattens out over time.
A new national study, however, provides additional support for the idea of an “exposure effect” from proximity to gaming facilities. Researchers at Buffalo University report that living within 10 miles of a large-scale gaming operation was linked with a 90 percent increase in gambling problems, a finding very similar to the two-fold increase in problem gambling in the 1999 report.
“What’s important is that both teams of researchers, working independently of each other, were able to identify the same relationship,” says Rachel Volberg, president of the National Council on Problem Gambling and an adjunct professor of public health at the University of Massachusetts–Amherst, who was involved in the 1999 report.
In minimizing the risk, the gaming industry often points to the figures on the percentage of problem gamblers in the overall population. But that ignores a question that may be more relevant to debates over gambling expansion, namely, what percentage of casino visitors or of casino revenue comes from those in the throes of pathological addiction? Volberg tried to answer that question, looking at different types of games in different states. In her research, problem gamblers accounted for 15 to 18 percent of slot revenue in Iowa and Mississippi, 33 percent of revenue from table games in Iowa, and 75 percent of bingo revenue in Mississippi.
Earl Grinols, a Baylor University economist and a senior economist to the Council of Economic Advisers in the Reagan administration, says the social costs of gambling are far higher than the industry would have anyone believe. Grinols, the author of Gambling in America: Costs and Benefits, published last year, says that each problem gambler accounts for $13,000 per year in social costs related to theft, absenteeism at work, and financial hardship faced by families. He says the costs to the economy from problem gambling could be as high as $54 billion per year, or roughly half the $110 billion that is attributed to drug abuse by the US General Accounting Office.
Taking the research as a whole, “somewhere between one-third and one-half of the revenues to casinos are coming from problem and pathological gamblers,” maintains Grinols. “So this is an industry, like it or not, that is making its money off the sickness of its clients. Government is supposed to be the protector and guardian of the community, not the predator.”
While Grinols is outspoken on the downsides of gambling and has testified before numerous state legislatures in opposition to gambling expansion, others retain a posture of studious neutrality.
Reilly, the executive director of the Harvard research institute on gambling, says such issues are not for researchers to address. “It’s not for us to say,” she says of debates over proposals for expanded gambling. “Scientists are not advocates. Show me a scientist who is an advocate and they’re not a scientist.”
But if addiction is the Achilles’ heel of the gambling industry, questions about their funding sources can be the Achilles’ heel of those involved in the research and treatment services related to problem gambling. The Harvard center is supported almost entirely by an annual $1.2 million grant from a Washington-based nonprofit foundation that is, in turn, entirely funded by the gambling industry. Reilly says the institute’s research should be judged not on its funding source, but on its merits, and the peer-reviewed scrutiny it must stand up to in getting published in scientific journals. “The proof is in the pudding,” she says.
Lottery director Joe Sullivan: "Moral
discussions" are not part of his job.
The Massachusetts Council on Compulsive Gambling, whose $655,000 budget comes entirely from the state lottery commission, also refrains from taking a position on expanded gambling, even though Scanlan, the council director, says, “I think it’s safe to say it would increase the number of people with problems.”
While some researchers and counseling centers stay out of the fray of debate over gambling expansion, some of the fiercest opponents of gambling often find themselves in league with unusual allies.
Several years ago, when he was working on a campaign to stop casino legislation in New York, Thomas Grey, president of the National Council Against Legalized Gambling, found himself in cahoots with associates of Donald Trump, who worried that casinos in the Empire State would cut into Trump’s interests in Atlantic City. More recently, Grey found himself working with bar owners in Madison, Wis., who were concerned that proposed slot machines would steal their customers. “It doesn’t mean I’d endorse taverns in Madison, but it doesn’t hurt that they were opposed to having casinos,” says Grey.
Grey talks about the gambling battle more in the language of the Vietnam War infantryman that he was than the Methodist minister he now is. Grey says he often gets calls from people in the gambling industry who share information with him as part of an effort to do in a rival’s bid. “Their greed and their willingness to attack each other is worth two divisions to us,” he says.
HITTING THE LOTTERY
The strangest bedfellow of all in the debate over gambling expansion here is undoubtedly the state’s biggest gambling promoter, the Massachusetts State Lottery. Lottery officials, and state Treasurer Tim Cahill, whose office oversees the lottery, have been the most compelling voices urging caution, warning of the danger that casinos or slot machines could hurt lottery sales—and the local aid money that it is tied to. But that stance could change if the lottery were put in charge of expanded gaming options in Massachusetts.
“If it’s going to happen—and I’m not taking a stand as to whether it should—we’ve made the case it should be overseen by the lottery,” says Cahill.
The squat brick building that is the Braintree headquarters of the lottery doesn’t hold a candle to the gambling palaces of Connecticut, which record more than 34 million visits each year. But don’t judge a bookie by its cover.
‘The state becomes addicted to gambling more than any one individual.’
Inside, at a nerve center of computers and monitors, IT managers track the bets being taken in by 7,800 lottery agents across the state, and watch over the systems that are generating a new set of keno numbers every four minutes from 5 a.m. until midnight. But it is from the building’s huge mailroom, where an average $10 million a day worth of instant scratch tickets are shipped to outlets across the state, that the lottery packs its true cash-generating punch.
There are 30 different scratch games being mailed on a February morning. The instant tickets account for almost 70 percent of lottery sales, and the commission staff is constantly devising new games. With one agent for every 880 residents, the lottery has the highest per-capita retail presence in the country. It also claims one of the biggest payouts, returning 72 percent of gross revenues in prizes. Joe Sullivan, the lottery’s executive director, points out that the $900 million the lottery returned to state coffers last year was two-and-a-quarter times more than what the giant Connecticut casinos returned to the Nutmeg State, and that the lottery did so based on only one-quarter the casinos’ $16 billion in gross revenues.
Sullivan has heard all the arguments against the lottery: That it’s a bad way to raise revenue. That it preys on lower-income residents, who are more apt to see a scratch ticket as a way to financial security than education or career ladder. But Sullivan also knows that every city and town in the state is counting on him to deliver at least as much lottery aid money as last year, if not more.
“Our role is not to get into any kind of moral discussions, but to run a business,” says Sullivan, a former Braintree state representative. “We’re a public agency, we carry a public mission, but our job is to run the place in a business mode.”
These days, that business mode once again includes aggressive promotion of its products through advertising. From 1997 through 2002 lottery advertising dried up, due largely to the objections of then-Senate president Tom Birmingham, who killed the commission’s advertising budget while he was in power.
“I honestly am not moralistic about gambling,” says Birmingham, who is now in private legal practice. “Some people like the Alvin Ailey dance troupe, some people like to go to the Wonderland dog track. But advertising on the lottery represents one of the worst relationships imaginable between a government and its citizenry. The government is [using] tax dollars to try to convince some of the most gullible people in the state to place what amounts to a sucker’s bet. I’m not saying you can’t get more [lottery revenues by advertising]. I’d suggest if you can, at some level, they’re ill-gotten gains.”
As soon as Birmingham left office in 2003, the lottery won back an advertising budget from the Legislature, as part of the new treasurer’s contribution to solving state and local fiscal problems. But Cahill insists that he’s not trying to pick the pockets of habitual lottery players even cleaner. Rather, he says the ad campaigns are focused on “the casual gambler, the person who might only play when the jackpot is high, and play for entertainment value.”
The latest run of ads play off the idea that, with lottery money going to cities and towns, you win even if you lose. “Whoever said you can’t win ’em all didn’t live in Massachusetts,” is the punch line of one ad popping up on Web sites such as boston.com.
To McGowan, that kind of appeal reflects all that’s wrong with state-sponsored gambling. “Be a sucker at all these games that give you a God-awful rate of return, but you should feel good because it’s helping your local town and city,” says McGowan. “Is this really the way you want to raise money for the state?”
The answer from state leaders seems, emphatically, to be yes. After budgeting $5 million for the first year the lottery resumed advertising, the Legislature doubled the ad budget last year to $10 million. This year, the Romney administration has proposed a further increase to $15 million, under the heading “revenue maximization.”
CALL AND RAISE
Whether through the lottery or slot machines, “the state becomes addicted to gambling more than any one individual,” says McGowan. And like any addict, states sometimes bend their own rules to feed their habit. Connecticut and Rhode Island, like Massachusetts, have adopted statewide workplace smoking bans in recent years. But those two states carved out exemptions for their gaming facilities, so as not to cut into the gambling revenues they get a share of.
“The hypocrisy is palpable,” says Rod Driver, a former Rhode Island lawmaker who battled unsuccessfully against the introduction of slot machines there.
“In economics we always talk about maximizing profits,” says McGowan. “Could anyone truly say this is an industry that we would truly want to see maximize its profits, whether the state is receiving it or the industry?”
Jay Ash, the Chelsea city manager, knows his municipal budget is bolstered by the losses of lottery players, including his city’s own citizens. “It’s fool’s gold,” he says, speaking of the shiny scratch tickets that are a bigger staple at some Chelsea convenience stores than milk or bread. “You don’t return $750 million to the cities and towns without having a lot of losers.”
Though he doesn’t know what he’d do without the $5 million Chelsea gets in lottery aid, Ash is mindful that the price of that aid was nearly $30 million spent at Chelsea lottery outlets. That works out to nearly $1,000 a year for every man, woman, and child in one of the state’s poorest communities.
Al Rezendes’s contribution to the lottery’s success is likely much higher. Unshaven and leaning on a cane early on a Sunday afternoon in February, he makes several loops between the front counter at Sully’s to buy more tickets and the keno corner in the back, where he scratches away at the silvery backing to reveal his fate, all the while keeping one eye fixed on the keno monitor. Fuming about the lottery’s lousy odds, Rezendes says some sort of bonus should be funneled back to regular lottery players, a recognition of their role in helping to fill municipal coffers that would be akin to the points that regular casino-goers build up for perks.
But for him, as with thousands of others with a seemingly insatiable itch to scratch, such rewards would likely only amount to another seductive come-on. After a string of losing scratch tickets, Rezendes finally hits one for two dollars. He heads to the front counter at Sully’s and hands it to the clerk. “Give me two more.”