California Lottery’s Foes Say System Is Due for an Overhaul

If Democratic state Sen. Don Perata of Oakland had his way, he would sell the California Lottery to a private operator.

“It is time to look at whether the lottery should be offered to a private interest in exchange for a guaranteed rate of return for the schools that is higher than what they get today,” he said. “Then, we just get the hell out of the business.”

But Perata, chairman of the Senate Government Organization Committee, which handles gambling issues, concedes that chances are slim that he could muster enough votes in the Legislature to sell it any time soon.

Even so, Perata and other Democrats believe the California Lottery, created by a ballot initiative in 1984, is overdue for a thorough examination, especially with a vast expansion of Indian gambling expected next year.

“It hasn’t been looked at for years. . . . Problems were ignored. Let’s tip over the apple cart and let everything roll out and see what we have,” he said in an interview.

Long an opponent of the lottery, Perata feels particularly stung by a report last week from the California Lottery suggesting that the ethnicity and household incomes of players virtually reflect the population of California as a whole.

“We hope this will end the frequently held impression that lottery players are disproportionately of one ethnic or income group,” said Dan Apodaca, chairman of the lottery commission.

The report said whites account for 55% of the population and 52% of lottery players. Similarly, Latinos make up 26% of the population and 29% of lottery players; African Americans are 6% of the population and 7% of lottery participants. Asian Americans were listed as 12% of the population and 8% of lottery players.

Based on interviews of players as they exited lottery outlets, the survey said 35% of lottery purchases are made by players whose household incomes total $25,000 a year or less. Another 9% are made by Californians whose incomes range between $25,000 and $34,999, it said.

At the same time, 56% of lottery tickets are sold to players whose annual household incomes range from $35,000 to more than $50,000, the report noted; the median income is $40,000 in California.

The report, which drew from telephone surveys, exit interviews and population data from the state Department of Finance, asserted that the information “dispels the perception that primarily lower-income people” play the lottery.

Lottery spokeswoman Norma Minas said the belief that poor people play the lottery disproportionately is the stuff of “urban legends and myths.”

“Sometimes people are having a hard time dispelling their own feelings about that data,” she said.

Perata and former Democratic Lt. Gov. Leo T. McCarthy, a critic of expanded gambling, said the findings do not alter their perceptions. But for Perata, 35% is too high. “They claim there is no disproportionate playing of the lottery by minorities and the poor and disadvantaged communities, but their 35% figure belies their conclusions,” Perata said.

The conclusions, he said, only rekindle the long-running debate over “use of a state-run lottery system, allegedly to support public education, when you are targeting the very people who can afford it the least.”

Throughout its 14 years, the lottery, which must give 34% of its profits to public schools, has denied suggestions that low-income and minority populations are targeted as customers.

“As far as the whole issue of proportion of income to purchases made, remember this is a $1 [ticket] purchase,” made voluntarily, Minas said.

Any purchase, she noted, consumes a bigger percentage of a poor person’s income than the same purchase made by a wealthier individual. “That argument holds true for life in general,” she said.

McCarthy, a member of the national Gambling Impact Study Commission, said the report failed to address tough questions, including how much of their disposable income poor players spend on lottery chances.

“We need to find out specifically if we are hurting anybody with this lottery. Are there a number of people who are spending a high percentage of their disposable income to buy lottery tickets and doing harm to their families? We cannot know that from this survey,” McCarthy said.

As a member of the national gambling panel, McCarthy said, he believes state-run lotteries throughout the country are in “denial that they contribute to the problem of pathological gambling.”

Perata said he believes additional income and ethnicity information is stored in lottery commission data banks, but that lottery officials are reluctant to make it public.

Minas said she doubts that the lottery’s data banks would yield the details Perata has in mind.

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Who Plays

The race and ethnicity of California adults who play the lottery almost mirrors the makeup pof the state’s adult population. More than one-third of all players have annual incomes of $25,000 or less.