Fears stimulus money will be spent unwisely
The Stop Predatory Gambling foundation is planning to send letters to US governors and attorney generals asking them to suspend all lotteries for at least 30 days after citizens receive their government stimulus checks. The letters will address key officials in 45 US states as well as the District of Columbia.
Americans receiving $1,200 in stimulus checks amid the ongoing coronavirus crisis
Video lottery terminals, scratch-offs, and jackpot draws are all part of state lottery offerings. Les Bernal, the director of the anti-gambling group, said people buy lottery products to try to improve their financial health, particularly in desperate times.
With Americans receiving $1,200 in stimulus checks amid the ongoing coronavirus crisis, he fears the money will be spent on lottery products. This would defeat the idea of this financial aid, which is aimed at helping families and encouraging spending across the economy.
Lotteries continuing to operate
An early draft of the letter was sent to the Wall Street Journal. Bernal wrote that the “state government is continuing to market its lottery gambling games at the very same moment that citizens are receiving their economic relief checks from the US Treasury.”
The likes of gas stations and convenience stores, being essential businesses, remain open despite the ongoing pandemic. These allow people to purchase lottery products. There are also six states where one can buy lottery tickets online.
Alaska, Hawaii, Alabama, Nevada, and Utah are the only US states that are currently without a lottery.
Likely opposition from states
Since the shutdown across the US kicked in during March, 22 million Americans have been looking for unemployment benefits. With tax revenues dropping across the board, state governments will likely not be willing to also cut lottery tax revenue by suspending these offerings. In 2018, lottery sales in the country totaled $76bn.
state governments will likely not be willing to also cut lottery tax revenue
The Maryland State Lottery & Gaming Control Agency’s director, Gordon Medenica, spoke about the reason why state governments would not support the measure. He said lotteries exist in the country to support public programs such as education.
Reliance on lottery tickets
According to behavioral economics, lower-income individuals spend a higher portion of total income on lottery tickets than wealthier people. They buy lottery tickets because they need money, rather than for entertainment purposes.
According to Maine lottery data, a 1% rise in unemployment in a certain ZIP code leads to a 4.7% increase in lottery ticket sales in the area. David Just, a Cornell University behavioral economist, said: “This is the only way to preserve this dream of climbing out of poverty for some.”