One entity that is definitely addicted to gambling is the government of the state of New York. It counts on a fix of $3 billion a year that its citizens lose in state-sponsored games, and if it didn’t get it, it would surely go into withdrawal.
Most of the $3 billion goes to support our public schools, which the state is forever talking up by way of justifying the otherwise unseemly business of gambling, and that money amounts to 15 percent of what the state gives to schools.
But of course money is fungible, meaning it can be spent on anything, so when $2.6 billion, for example, is earmarked for schools, that same amount is freed up for other purposes. If it were earmarked for civil service salaries the effect would be the same — just so you don’t get the idea that schools are dependent on the Lottery. The state is dependent on the Lottery, as well as on slot machines at casinos like the one in Saratoga.
If the citizens of our great state suddenly decided to stop buying scratch-off tickets and Powerball tickets by the handful, and stopped pouring money into slot machines, our government would quiver like an alcoholic with the worst case of delirium tremens you ever saw.
Whence comes the money?
The biggest single source is scratch-off tickets, which, with their promise of instant reward, are the gambling equivalent of crack. The state sold $3.5 billion worth of those last year, and if you have ever been stuck in line at a convenience store, waiting for some poor soul to purchase his clutch of tickets before you could pay for your coffee, you won’t find that number hard to believe. Gamblers I have talked to tell me they don’t even wait to get home to see if they have won, and when they do win, they just use the money to immediately buy more tickets.
Sales of scratch-off tickets actually declined a little bit (1.8 percent) last year, as sales of Powerball tickets, with their promise of astronomical wealth, increased.
But overall, lottery sales and the take from slot machines increased $382 million, or 14.3 percent, over the previous year, according to financial statements posted on the Lottery Division’s website, so the slight decline in scratch-off sales need not concern our addicted government. There is always a new game to inspire the citizenry.
The return to the bettor on these games is of course dreadful. The twice-a-week Lotto racket returns just 40 percent of its income in the form of prizes — though the prizes are much ballyhooed in media events and the impression is conveyed that all you need to do is buy a ticket and the next thing you know you’ll be a millionaire. (“Hey, you never know,” is the Lottery’s slogan.)
The return on other games runs to 60 percent, which is not hugely better. If you were betting with a friend on the flip of a coin, a dollar per flip, the return would be 100 percent. If you were in a gambling house the return would be somewhat less, allowing for the house’s retaining what amounts to a commission. But 40 percent or 60 percent is a joke.
State-sponsored lottery games are sometimes called a tax on the poor, or on the gullible, or on people who can’t do math.
The return on slot machines at casinos like the one at the old Saratoga Raceway appears to be far better — 92 percent — but the end result is the same, and the customer still loses his shirt.
That’s because the casino retains 8 percent not of the stake that you take to play with when you visit for an evening but of every bet that you make, meaning every time you bet a dollar, the casino keeps 8 cents and gives you back 92 cents, on average, over the long term. At that rate your stake of $100 or whatever it is does not last long, as any casino patron who is not hopelessly deluded can tell you.
Last year, customers at the eight state-sanctioned casinos lost a total of $1.1 billion, about half of which went to the state.
By far the most profitable was the casino at Yonkers Raceway, which raked in $595 million, or more than the other seven combined. Saratoga was in second place with $141 million in customer losses.
Daily Numbers games run by the state Lottery Division had sales of $854 million; Win 4, $777 million; MegaMillions, $463 million; Quick Draw, another crack equivalent, $424 million; Powerball, $203 million; and so on.
“We are glad the Lottery can contribute to education in New York,” Lottery director Gordon Medenica said in announcing the year’s results. “And it all comes from New Yorkers helping New Yorkers: 75 percent of New Yorkers play Lottery games, and it is their enthusiasm for our fun and entertaining games that benefits us all.”
To make sure our enthusiasm doesn’t flag, the state spends some of the money we lose to encourage us to play more.
In the last fiscal year for which an audited report is available, that is, fiscal year 2009-10, the Lottery Division spent $86 million on advertising and marketing, as follows: $49 million to promote its “draw” games like Powerball and Lotto, $26 million to encourage us to buy scratch-off tickets, and $11 million for generic advertising.
The casinos have their own advertising budgets, which amount to 10 percent of the customers’ losses (which the casinos call “net win”) in most cases and 8 percent in the case of Yonkers, or 9.2 percent statewide. Last year that worked out to a total of $102 million of the customers’ losses turned back around to encourage them to keep playing, and of course to attract new customers.
It’s what pays for those billboards showing blonde models leaping euphorically in front of slot machines.