Ken Rodriguez: Surprise, surprise: The lottery rifles the pockets of the poor
Web Posted: 02/06/2005 12:00 AM CST

San Antonio Express-News

The myth-peddling Texas Lottery Commission does not want you to know the truth about the spending habits of the lottery's poorest and least educated players.

So I'll give you the truth that's shaded and buried in its latest demographic study:

Texans who earn the least spend more per player on the lottery than those in the highest income groups.

Texans with the least amount of education — high school dropouts — spend more than three times as much as those with college degrees.

African Americans and Hispanics spend, per player, almost twice as much as Anglos.

Thanks to data gathered by a Texas Tech research group, we have confirmation of long-held suspicions: The lottery hammers the poor, the uneducated and minorities.

One telling number: A person who earns less than $20,000 a year spend more on the lottery each month — $76.50 — than someone who earns $50,000 to $59,000 — $39.24 per month.

The numbers, of course, do not square with the Lottery Commission's long-running lie that its games do not hit the poor harder than the rich. So I asked commission spokesman Bobby Heith for a response to the new data.

"The results are what they are," he said. "The commission is not disputing any findings. They felt the report was conducted in a good, fair way."

That's a stunning admission, but one you won't find easily in the 24-page report that's posted deep inside the commission's Web site, www.txlottery.org, under the "news and events" heading.

What you will find is phrasing in the report's executive summary that suggests equity among all lottery players.

From page 2: "The rate of participation in Texas Lottery games is consistent across income categories, with no income group more likely than any other group to play lottery games."

Also from page 2: "The rate of participation is also consistent across groups defined by level of education, with no group more likely than any other group to play the lottery."

Sounds good, right? Well, there is a big difference between near "equal participation" in the lottery and "equal spending." Nowhere in the report's summary or conclusions will you find mention of the gross spending inequity between rich and poor. Yet, in general, those earning less than $50,000 are spending far more per player than those with incomes above $50,000.

"This was a clear example of a statistical study being re-shaped to the desires of those who paid for it," says Gerald Basuld, a San Antonio Community College statistics professor.

The conclusion you will find on the final page doesn't match the facts: "... there appear to be few differences across demographic categories ... in the average amount spent on lottery games per month."

Really? That's not what the table on page 7 shows:

High school dropouts spend an average of $173.17 per month on the lottery while those with college degrees spend $48.61.

Blacks and Hispanics spend $108.96 and $102.20, respectively, while whites spend $55.02.

Those who earn less than $20,000 spend $76.50 per month. But people in the $60,000-$75,000 income bracket spend $34.37 per month while the $76,000-$100,000 income group spends even less, $28.96. Only the wealthiest — those whose income is above $100,000 — spend close to the bottom-income group: $71.42.

The youngest players, ages 18 to 24, spend far more per month ($91.23) than the oldest. The 55-64 age group spends $56.34, and those 65 and older spend $60.45.

Surprised? You might be surprised to know that the Texas Tech research group submitted two reports. It submitted the first one in early January, then, at the commission's suggestion, made changes after some members felt the report might reflect poorly on the lottery.

One notable change appears on the final page. The report's first conclusion, which was not released to the public, noted that higher educated players spend less on the lottery. The second conclusion omits this fact. Only the second conclusion appears on the Web site.

Commission members had wondered why previous studies hadn't shown gross spending differences between income groups.

Well, previous studies did not ask lottery players how much they spent per month.

Now that the commission has the truth, is it morally obligated to inform Texans that the lottery hits the poor and uneducated harder than others?

Absolutely.

Will the commission do it?

Absolutely not.

To contact Ken Rodriguez, call (210) 250-3369 or e-mail krodriguez@express-news.net.

Survey disputes 2003 report that middle-age whites play game most

By Cory Chandler
AVALANCHE-JOURNAL

They redefined some data, took a new angle on results, and may have turned an analysis of which Texans are most likely to purchase a lottery ticket on its head.

Their findings: Despite earlier reports stating otherwise, the poorest and least educated Texans could be spending more money per month on Texas Lottery games.

Strapped for time and working under what they believe was a call for change, Texas Tech Earl Survey Research Laboratory researchers prepared a statutory report for the Lottery Commission to present to state lawmakers.

The report finds that while the number of people playing lottery games continues a gradual decline, those who continue playing are spending more money on the lottery.

Excluding some cases that were considered either unusual or possibly deceitful, lottery players earning incomes of between $20,000 and $29,000 per year spent more money on average on the games last year than those in higher income brackets. Also, players who have either dropped out of high school or hold only a high school diploma spent more than those with at least some college.

The study also found that Hispanics are most likely to play the lottery while blacks tend to spend the most when they do.

These results differ greatly from a 2003 report given by University of Texas researchers to the Texas Lottery Commission. Their report found that, "contrary to popular belief," those with the lowest income and education levels are the least likely to play Texas Lottery games. This finding, which named middle-age white college graduates earning $50,000 or more as the most likely players, replicated some findings in four previous studies taken at two-year intervals since 1995.
And this is true, to some extent, noted Brian Cannon, operations director for the Earl Survey Research Laboratory, during a report to lottery commissioners in January.

In "absolute numbers," these Texans are the predominant players, "but it's a function of the fact that the state is made up of more white residents than any other race."

Cannon said he received a request from the commission to make some changes to the way the results are reported.

"We looked over it and we came to the same conclusion, that the approach that was taken before led to some, what I would characterize as potentially misleading conclusions."

Cannon noted that the previous survey listed its lowest income category as $10,000 or less - a "pretty extreme lower end of the category" in his estimation. The upper income category, in contrast, was set at $50,000 or more a year and "included an awful lot of people," he said.

"It's just that you have so many people in that income category that they sort of swamp the results on everybody else," he noted.

In the Tech study, the ceiling was raised to $100,000 or more a year and additional income categories were defined.

The researchers also studied ethnic participation in proportion to Texas' overall population.
Cannon noted several times that time constrictions hindered the study in some ways. He said he would have liked more time to beef up demographic data in areas like income, ethnicity - especially where Hispanics are concerned - and education.

The survey, conducted in late November and early December, interviewed around 1,255 Texas adult residents using randomly generated phone numbers. This sampling was somewhat lower than in 2003, when the UT study interviewed just over 1,700 Texans.

In one example, Cannon said that the 200 Hispanics interviewed were adequate for statistical comparisons. But that number, when compared to the total sample, was significantly lower than Hispanic demographics across the state. The results could change if they were applied to the Texas population as a whole.

Tech got a late start on the study after lottery commissioners failed to find another bidder.
"We would have probably preferred to have at least an extra couple of weeks to conduct interviews," Cannon said.

He presented a draft of the report to commissioners Jan. 7.

Commissioners questioned the findings.

Commission chairman Tom Clowe noted that the lottery is accused by critics of taking money from people who are least able to play, including minorities, and those with lower income and lower education.

He said the report, required by the Legislature every two years, should serve to keep the commission balanced as it seeks to identify its players and their wants.

"We had to have the report, and we felt very good that Texas Tech stepped up and did it," Clowe said.

Based on recommendations, Tech made some organizational changes to add clarity in some areas of the report.

"It was a draft because there was such a tight turnaround," Cannon said.
(What should have been said here is that his report became a draft because the Commission objected to his findings and the Commission fears losing $30 million in advertising dollars as Commissioner Clowe explained during the meeting. But this statement was deleted from the transcript that is posted on the TLC web site.)

He said there hasn't been any discussion of involvement in future projects.
(And there probably won't be!)

cory.chandler@lubbockonline.com t 766-8722

Read what happened to me as I tried to talk with the
gentleman who gave the Demographics Report. Here's a
copy of the complaint letter that I sent to the DA. Click here.

Hungry loser shuns lottery

By RICK CASEY
Houston Chronicle
Feb. 1, 2005, 10:39PM

Reporters love to talk to taxi drivers.

It's not so much that they give us the illusion that we are in touch with the common man as it is that you never know what's going to come out of their mouths.

Once, while in Seattle during a presidential campaign stop, I talked politics with my cabbie.

"I'm voting for the socialist candidate," he announced.

Why?

"He's the only one who ain't never held a government job."

I recently chatted with a Houston hack on the ride in from Bush Intercontinental. Somehow we got talking about the lottery and he told me he had just kicked the habit.

"Every morning I was spending my breakfast money on tickets," he said. "It only made me a hungry loser."

I was reminded of him this week when the Texas Lottery Commission released its most recent demographic study. It confirmed what I thought sitting in that cab: The lottery thrives on hungry losers.

The study's executive summary nearly threw me off. It said "participation is consistent" across various groups as defined by income and education, "with no group more likely than any other to play the lottery."

Soak-the-poor program
That's true. The smallest rate of participation is among adults with income of $20,000 to $29,000 per year, at 41 percent. The highest is among those with income between $76,000 and $100,000, at 53 percent.

But it doesn't tell you how much each group spends on the lottery. That's where it gets ugly.

Those gamblers in the $20,000-$29,000 range spend an average of $106 a month on the lottery. Those in the $76,000-$100,000 range spend $30 a month. High school dropouts spend the most, $173 monthly. Those with a college degree spend the least, $49 a month.

(The numbers differ from those reported in Tuesday's Chronicle, which excluded the most-extravagant players.)

The Texas Lottery, which removed $3.5 billion from gamblers' pockets last year, is clearly a soak-the-poor program.

As such, it fits in neatly to Texas tax culture.

Guess who loses?
Consider the sales tax, one of the highest in the nation.

According to the state comptroller's office, the 20 percent of Texans who make under $26,800 annually pay 4.2 percent of their income in sales taxes. The one-fifth of Texans who make more than $126,300 pay just 1.1 percent of their income in sales taxes.

Recent congressional legislation making sales tax deductible on federal income tax hardly makes the system fairer. For one thing, it's only available to those who itemize, which only a quarter of Texans (mostly upper-income) do.

For another, the value of the deduction rises with tax rates.

Some politicians want to lower property taxes by broadening or increasing the sales tax. As with any shift of taxes, there are winners and losers. Guess who the losers are.

Last year, Rep. Garnet Coleman said more than one-third of Texans and 53 percent of Houstonians are renters. If the sales tax goes up, they pay more. If the property tax goes down, their landlords pay less.

The reason is simple. Landlords will pass along lower costs when the market forces them to. In the meantime, renters get soaked.

As a homeowner, I'm all for property tax relief. State cutbacks in education have forced school districts to load too much onto that tax.

But at some point doesn't it get embarrassing for us self-sufficient Texans to keep loading more of our burdens on those too poor to influence legislators and too uneducated to understand statistics?

You can write to Rick Casey at P.O. Box 4260, Houston, TX 77210, or e-mail him at rick.casey@chron.com.

Read what happened to me as I tried to talk with the
gentleman who gave the Demographics Report. Here's a
copy of the complaint letter that I sent to the DA. Click here.