Bill Would Force Lottery Winners to Repay Aid

You’re poor, so poor you’re on welfare, squeezing rent, groceries and utility payments out of a meager government check. Money’s tight, but each week you toss a few dollars at the lottery, your long-odds shot at instant wealth.

State Sen. Tim Leslie (R-Carnelian Bay) would like to object. He says welfare recipients “should not gamble with taxpayer dollars,” that doing so is “fundamentally wrong.”

To reinforce his point, Leslie has introduced legislation that would take a big bite out of lottery jackpots won by the poorest of the poor. His bill would force those on aid to fork over up to half of their lottery winnings to repay their welfare aid to the state.

The law, covering any jackpot exceeding $600, would apply to all sorts of public assistance, including that paid to the blind, elderly and disabled.

Many of Leslie’s constituents are saying “bravo”--and even urging their senator to go further by outlawing gambling for those reliant on aid. Among his supporters is Darrell Hopkins of Auburn, who wrote in a letter to Leslie this month: “I believe anyone who can gamble on the lottery is not in need of public assistance.”

But critics say Leslie’s concept is punitive, discriminating against those on public assistance. State Sen. Diane Watson (D-Los Angeles) complained that millions of other Californians--from nursing home patients to public university students--enjoy state financial subsidies, but only welfare recipients are “penalized” under Leslie’s bill.

The bill is “a double insult to the poor, for it is the poorest people of this state who create lottery winnings,” Watson added. “Now the state, after luring the poor into legalized public gambling, wants to deny them even the faintest hope of a benefit.”

A recent study by UCLA researchers showed that about half of lottery ticket purchases are from Californians with annual household incomes below $35,000.

Others object to the bill as being too intrusive, improperly dictating how the poor may spend their money.

“There comes a point where one can micro-manage and play Big Brother with all the decisions a low-income person has to make,” said Casey McKeever of the Western Center on Law and Poverty. The Leslie bill, he said, “is in that category.”

Leslie denies that he is “picking on poor people” or trying to tell them how to manage their cash.

“People can do what they want with their money,” he said. “But doggone it, if you become an instant millionaire, you ought to share it with the taxpayers who helped you win.”

Leslie added that he only asks recipients to give up half their jackpots, and would only require repayment of welfare benefits collected over the last 10 years. If a recipient won $80,000 and had collected $150,000 in welfare benefits, the state would keep $40,000.

Although some observers say the bill’s chances of passage are as poor as the odds of becoming a Super Lotto winner, at least two other states--New York and New Jersey--have such laws on the books.

In New York, about $1.1 million in lottery winnings were recovered by the state during the program’s first nine months. That amount included $1,250 collected from a disabled woman who was on welfare for two years after she was struck by a van, losing her teeth and injuring her back.

New York’s program was adopted as part of Gov. George Pataki’s welfare reform package of 1995. Pataki said seizure of lottery winnings was a way to promote individual responsibility and emphasize the “temporary nature” of welfare benefits.

Although Leslie’s bill could make welfare recipients hesitant to gamble on the lottery--thereby hurting lottery sales--officials at lottery headquarters in Sacramento are enthusiastic about the plan.

“I think it’s a great idea,” said the lottery’s interim director, Maryanne Gilliard. “I think California taxpayers should be reimbursed from any and all sources. And that includes welfare recipients.”

Gilliard said she believes those on aid have no business playing the lottery. “I think welfare payments should be utilized on housing and clothing and food. I would not consider lottery products to be in that category.”

Because welfare rolls are confidential, there are no statistics on how many aid recipients have been lottery winners. Such information only emerges if winners reveal it.

In 1985, a Vietnamese refugee named Hai Vo did just that, announcing that he had bought his winning lottery ticket--which brought a jackpot of $2 million--with his welfare check.

That admission sparked cries of outrage and spawned legislation that sought to bar those on public assistance from playing the lottery. That bill, by then-Assemblyman Tom Bane (D-Van Nuys), was considered unenforceable and failed to win any significant support.

If Leslie’s legislation becomes law, the state controller--who issues lottery checks--would determine whether a lottery winner is on welfare before any winnings are dispersed. For those winners who are on aid, deductions would be made to reimburse the state before the jackpot is paid out.

Numerous debts already are deducted from lottery checks, including payments for delinquent child support, parking tickets and student loans. Lottery prizes are exempt from local and state taxes, but are subject to federal income tax.

Leslie’s bill specifies that the money collected from lottery winnings would be used to buy computers for school classrooms.

Leslie is a longtime lottery foe, arguing that it is inappropriate for the state to sponsor legalized gambling.

Last year, the California Lottery recorded $2.3 billion in sales and distributed more than $1.1 billion in prizes.

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Lotto Players

Here is a breakdown of California Lottery sales by yearly household income of players:

Under $15,000: 13%

$15,000 to $35,000: 36%

$35,000 to $50,000: 29%

$50,000 to $60,000: 11%

$60,000 or more: 11%

Sources: California State Lottery and UCLA Statistical Consulting Center, June, 1996