The News Media Are Key Proponents of State-Run Lotteries
by Jerome F. Winzig
When news organizations take part in an event they are covering, they run the very real risk of losing their presumed impartiality. When they go even further and begin to promote an event, they rightfully lose the respect of their viewers and readers. When they compromise their integrity and begin to distort the facts of an event, the results are insidious and dangerous.
That is exactly what has happened in recent years with news coverage of state gambling lotteries by daily metropolitan newspapers and local television stations. Lottery numbers are featured prominently at the beginning of television news programs. Stations that have official rights to broadcast drawing results first brag about it. Newspapers regularly publish drawing results and run feature stories on winners of large jackpots.
This promotion of gambling makes news organizations participants in these state lotteries, destroys their objectivity, renders them incapable of honestly covering the realities of state-sponsored gambling, and gives them an important financial stake in the continued growth of state-run lotteries.
A case in point is the coverage given to this month's record-breaking jackpot for the multi-state "Big Game" lottery. Newspapers and television news stations in Minnesota joined the lottery hype for weeks, even though the nearest participating states were Michigan and Illinois. News crews traveled to convenience stores to interview gamblers, and banter between news anchors about the size of the jackpot was common.
More disturbing was the way in which most news organizations prominently highlighted the alleged size of the jackpot--$363 million. Of course, there were occasional explanations that the $363 million would not be paid out up front but would be spread out over 26 years. Nonetheless, it was the $363 million figure that was quoted again and again.
It's amazing how shamelessly these news organizations bought into the lottery's propaganda. If another industry sold its product in this fashion, the news media would expose it as a fraud. Suppose, for instance, an insurance company were to sell $100,000 life insurance policies that paid that amount in the form of a 26-year annuity, and would pay just $50,000 to any policyholder who wanted his or her money immediately. It would be treated as a scandal.
Not so, however, with coverage of the Big Game lottery. Instead, for weeks newspaper headlines and television news teasers hyped the growing size of the lottery prize, and joined the frenzy when the prize allegedly went over $300 million, even though the actual current value of the prize was actually $150 million at the time. When the prize was finally won, stations ran photos of the first of the two winners. It showed them holding an oversized check made out to the family for "$181.5 million," even though the family will actually receive a check for about $90 million before taxes, and their actual take after taxes will be about $61.2 million.
Of course, that is still a lot of money. But how can a newspaper or television news program justify this intentional exaggeration of the jackpot's size, especially when the clear purpose is to encourage people to gamble even more? Aren't they really helping to fraudulently market a gambling product because they hope to attract more viewers and readers?
The news coverage of this event also glorified and celebrated conduct that is rather questionable. Under a headline that trumpeted, "Hot dog that's a lot of change!", they reported how the winner of the Big Game jackpot stopped to buy a hot dog, paid for it with a $100 bill, and--supposedly at his wife's urging--spent the change on lottery tickets. The man was lucky this time, but paying for a hot dog with a $100 bill and wasting $98 on a bunch of lottery tickets at 76 million-to-one odds is not a wise use of one's money, and it certainly is not responsible or sensible parenting.
The news organizations covering this event also reported only part of the event. They did not cover the millions of people who lost money on this single lottery jackpot. They did not report on the people who spent their whole paychecks on lottery tickets, and have no money for groceries or clothes or the electric bill.
Newspaper reports did not ask lottery officials about the average size of a lottery ticket sale., even though that might dispel the myth that this is all harmless fun costing participants just a couple of dollars a week. Television news reports did not ask how many people buy lottery tickets on credit.
News organizations also did not report that, in 1997, Americans spent an average of $160 per person on lottery tickets per person. Per person! That's an average of $12.30 per week for a family of four, 52 weeks of the year. If those "average" parents invested that same amount at an 8 percent annual return, starting at age 18, by age 67 they'd have $340,000. That's a pretty good return when you consider that the median net worth for a couple retiring in 1995 was $208,000.
The problem, however, is that this average family is statistical only. When you factor in the millions of people who never buy lottery tickets and those who buy them only on occasion, it is clear that some families are constantly spending $50, $100, $200, or more a week on state lottery tickets. If those families invested that money instead, by age 67 they'd have nest eggs of $1.3 million (at $50 a week), $2.7 million (at $100 a week), and $5.5 million (at $200 a week). But there isn't much on the news about that.
The news media do not examine the history of lotteries in the United States. They don't point out that we've been down this road twice before in our nation's history, when lotteries have enjoyed popularity until abuses led to their being outlawed. Lotteries were common in colonial times, but by the Civil War most states had prohibited them because of problems. After the Civil War, they made a brief comeback, especially the Louisiana state lottery. "The Serpent," as it was commonly known, sold lottery tickets across the country and generated tremendous profits (and lots of payoffs) until the U.S. Congress outlawed the interstate transportation of all lottery materials in 1895. For decades thereafter, legalized gambling was limited to horse race betting in Kentucky, Maryland, and New York. Then Nevada legalized casinos in 1931, and in 1964 New Hampshire started the first of the modern state lotteries.
News organizations do not report that state-run lotteries generally return a much lower percentage of wagered money back to the winners. Black jack tables return 98 percent of the wagers back to the winners and casino slot machines return 92 percent, but state-run lotteries generally pay out less than 50 percent of the amount wagered.
The news media do not investigate how lottery advertisers target the poor. Some ad campaigns and the introduction of new games are timed to coincide with the release of government benefit checks. Some billboards and radio campaigns focus on lower-income areas and markets. Other ads show people going from tattered clothing to tuxedos, champagne, and expensive cars, proclaiming "This could happen to you!"
By abandoning all pretense of news reporting when covering state-run lotteries, America's news organizations have endorsed a back-door method of taxation that is contributing to the impoverishment of many Americans. In 1997, total revenues by state-run lotteries in 37 states and the District of Columbia totaled nearly $34 billion. Many experts believe that compulsive gambling is on the rise across the country. One study in Iowa, for example, showed that the rate of compulsive gambling rose from 1.7% of the adult population in 1989 to 5.4% in 1995, after just six years of legalized gambling.
The shameless promotion of state-run lotteries is an addictive habit that the news media need to abandon now.