New Jersey Lottery

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Lottery is Regressive Tax, New Jersey Newspaper Finds

Special Report - December 9, 2005
A newspaper’s investigation into lottery ticket sales and lower income players has resulted in some not-so-surprising findings about the New Jersey lottery. An analysis by The Star-Ledger has confirmed that lottery sales are disproportionately high among lower income players—a finding that has been confirmed in lotteries across the country. The newspaper examined lottery sales by ZIP code over a five-year period and concluded that “the lottery is a regressive form of taxation” because ticket sales increase as income levels decrease. According to the numbers, communities with household incomes below $52,000 bought twice the number of tickets than those with households that make over $100,000. For example, ticket sales in the working town of Belleville are $13.3 million annually, while sales in affluent Hillsborough are only $1.8 million, both of which had similar sized populations.

The newspaper also found that the number of lottery outlets per capita is greater in poorer areas. In lower-income Bayonne there is one lottery outlet for every 750 residents, while Princeton (a higher-income area) has one lottery outlet for every 5,450 residents. Not surprisingly, it was revealed that the New Jersey lottery is more likely to allow licenses to lottery outlets in lower income areas, with the average number of outlets twice as high in poorer areas than affluent ones.

Faced with budget shortfalls, state officials in New Jersey, have been pressing for higher sales. In fact, money spent on lottery advertising has jumped in the last six years from $8 million to $19 million, the Star Ledger reported. The same is likely to happen in North Carolina as education programs become dependent on lottery money for funding, and ticket sales fail to meet expectations.

Stephen Daniels, director of research for the North Carolina Family Policy Council noted that, “The Star Ledger’s findings are evidence of one of the many disturbing elements of the lottery—that the state government is actively enticing citizens to gamble in order to make a profit. And those most likely to carry the burden of providing revenue to the state are those who can least afford it.”

Click here to view all of the NCFPC's policy papers on the lottery.