Story

Story >

Poor Are S.C. Lottery's Biggest Spenders

Special Report - March 22, 2006
Data recently examined by the Charlotte Observer has revealed a dangerous trend among those who participate in South Carolina’s education lottery—families who can least afford to play the numbers game are routinely its biggest spenders. Using statistics collected on the South Carolina lottery between 2002 and 2005, a March 18 Observer article found that low-income families devote greater portions of their annual earnings to the lottery than their more affluent counterparts. The article concluded that players earning less than $30,000 spent nearly three times as much on the lottery as those earning more than $50,000. Additionally, players with household median incomes of less than $30,000 devote an average of 2.3 percent of their yearly income on the lottery, while households generating incomes greater than $50,000 spent less than 0.5 percent.

As an example of this income disparity, the Observer specifically cited two neighborhoods in Charlotte, one of which contained low-income households that dedicated an average of $6.77 for every $1,000 of income. Conversely, the average spending in a higher-income Charlotte-area neighborhood was just 57 cents for every $1,000 of income. The Observer also found that minority families were disproportionately affected by the lottery. “Minorities have historically been over-represented among lottery players,” the article concluded. “In South Carolina, households with the same income levels in predominantly black neighborhoods generally spent more money than people in predominantly white neighborhoods.”

Stephen Daniels, director of research for the North Carolina Family Policy Council, commented that the data from South Carolina is indicative of lotteries nationwide. “Research clearly shows that lotteries prey upon those who can least afford it, and that fact will be no less true for North Carolina,” Daniels said. “Despite what proponents of state-sponsored gambling tell us, lotteries unequivocally target the most economically vulnerable among us. This trend is especially disturbing since the income being used to purchase lottery tickets would often otherwise be devoted to necessary living expenses.”

A New Jersey newspaper made a similar finding in December after it 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. The New Jersey Star-Ledger found that communities with household incomes below $52,000 bought twice the number of tickets than those with households that make over $100,000.

For more information on the negative economic and social consequences of state-sponsored gambling, download our policy paper entitled Losing the Lottery: Why the State Should Not Enter the Gambling Business. To view all of the NCFPC's policy papers on the lottery click here.