PART 1: LOSING BY THE NUMBERS IS NOT JUST BAD LUCK FOR THE POOR
News Staff Reporters
Updated: 06/24/08 2:21 PM
HOW LUCKY
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TOMORROW:
As casinos open, lottery sales drop
But he lost when other numbers were drawn later that day.
No surprise there.
If there's any neighborhood where players are bound to lose at the lottery, it's here, in the Broadway Fillmore section on Buffalo's East Side.
Of the 20 census tracts in Erie County where lottery players fared the worst during 2007, 11 are in Buffalo. Six of those are in East Side neighborhoods that rank among the poorest in Erie County, including where Johnson buys his tickets.
It's not that Johnson and others in this neighborhood have less luck at the lottery than those in wealthier areas.
They lose more because of the types of lottery games that are most popular, and therefore most available in these neighborhoods, according to a Buffalo News analysis, the first of its kind to trace the outcome of lottery tickets sold by individual retailers.
Johnson, for example, picked four numbers to play Win 4 and three numbers for the New York Daily Numbers.
These are the most popular games in this neighborhood.
They're also, statistically, among the games that pay out the least in overall winnings.
"I lost," said Johnson, 34. "I haven't hit a straight in a year."
Sometimes he plays twice a day, betting at least $15, and up to $30, "depending on how I feel."
Online games popular
Poorer neighborhoods tend to be popular spots for the lottery. Statewide, communities with median household incomes below $30,000 spent almost twice as much per adult on lottery tickets as communities with incomes exceeding $50,000, The News found. Buffalo's East Side is no exception, with 10 lottery outlets per square mile — more than any other part of Buffalo or Erie County.
Lottery data that The Buffalo News obtained traces the outcome of $22.8 million in instant tickets and online games in 2007 at 74 businesses in a seven-square-mile area of the East Side.
All these sales should produce a lot of winners.
Statewide, the New York Lottery returned $60 for every $100 wagered.
If that same 60 percent return held up on the East Side, the nearly $23 million bet there would return $13.7 million. Instead, just $12.3 million went to the winners on the East Side, or 54 percent.
What that means is the poorest among us not only buy a disproportionate share of lottery tickets, they lose disproportionately as well.
Bad luck might be part of the reason. But people in poor neighborhoods play more online games — like Daily Numbers and Win 4 — than the state average.
And those games have a lower rate of winnings than other lottery games.
The people in these neighborhoods play instant scratch-off games far less frequently than residents of the state as a whole, even though the scratch-off games have a higher rate of winnings.
"There's not enough money in scratch-offs. I like to play four digits," said Raymond Jones, 39, who works with Johnson. "I could win $500 [on a scratch-off], or with four numbers, I could win $5,000."
"I play every day," he added. "It's addictive."
So far, he hasn't won.
The 10,000-to-1 odds aren't that bad — by lottery standards — for the $5,000 Win 4 jackpot. Daily Numbers has 1,000-to-1 odds for the $500 top prize.
But the instant scratch-off games generally offer the biggest jackpots — the million-dollar bounties — as well as 1-in-5 odds of winning something, even if it's another $2 ticket.
By law, the New York Lottery must return 50 percent of the money wagered on the Daily Numbers and Win 4 games to the players.
For scratch-off games, the return is generally 65 percent — but for a few games it rises to 75 percent.
Overall, of the $6.5 billion spent on New York lottery tickets statewide last year, $3.9 billion … 60 percent … was returned as winnings. Some 59 percent of the total winnings went to those playing the instant scratch-off games, with 41 percent going to those playing online games.
The result: Communities like Buffalo's East Side, where more people play online lottery games, generally don't win as much as communities more partial to instant tickets.
The exception is Quick Draw, the online game that returns 60 percent to players.
But there are few Quick Draw games on Buffalo's East Side.
State lawmakers, viewing Quick Draw as addictive, limited the game's availability to businesses of a specified minimum size. As a result, just 16 of the 74 East Side locations offer Quick Draw, compared with 50 percent of 119 Cheektowaga locations.
Another online game not catching on in Buffalo is Mega Millions. The multistate game returns 50 percent of sales as prizes, but drawings are twice a week, not daily. Most of the winnings are returned to players in a jackpot that rolls over until someone wins.
On the city's East Side, vendors said Mega Millions sales pick up when there's a huge jackpot, but generally, customers are more interested in the daily games with $500 or $5,000 top prizes than the million-to-one chance at winning a Mega Millions jackpot twice a week.
'A mass market'
Lottery officials say they are aware that poor, minority neighborhoods tend to play more daily online games, and therefore generally win less.
The popularity of daily numbers games in these neighborhoods likely traces back to the roots of the lottery game, said New York Lottery director Gordon Medenica. Illegal numbers games were the precursor to the lottery, so it makes sense that communities where illegal numbers were popular continue showing an interest in the online games offered by the state, he speculated.
But Medenica said the lottery is not responsible for the choices players make. "We are not telling people what to play," he said.
The New York Lottery doesn't advertise games based on neighborhood preferences, but makes statewide marketing decisions, Medenica said.
"We don't target neighborhoods. We're a mass market," he said. "Seventy-five percent of New Yorkers play the lottery. The demographic profile of our players is pretty much the profile of the state. So it's highly misleading to say we're targeting the poor. Nothing we've seen in the research supports it."
Beyond that, he said, the lottery is designed to help finance education in the state. There are no plans to adjust the odds … and lose profits. "Fundamentally we want to make money for education. So we run the lottery as a business," Medenica said. "If you equalize the odds of instant and online, you're not going to help yourself any [financially]. Next year it would be $2 billion to education instead of $2.5 billion. That is not something we want to do."
Scratch-offs unpopular
At Chief's Food & Beverage on Genesee Street, and at many stores on the East Side, there's less opportunity to play anything but online games.
Walk into Chief's and you immediately see a small table offering tickets for the online lottery games, along with some advertising the lottery provides vendors for the Mega Millions online game.
The store's owner, who asked not to be identified, says instant scratch-off games don't sell well. Yet, when she offered a full line of them in the past, customers arrived as soon as the store opened each morning to redeem winning tickets, even if they were bought somewhere else. The small market didn't have enough money to redeem tickets early in the morning.
So now, she has a few scratch-off tickets behind the counter for anyone who asks, but generally, sells online games.
Around the corner, National Liquor Store owners Chet and Alice Opala also limit their scratch-off tickets.
One of the problems with the scratch-off games, they said, is that the state requires vendors to purchase unsold tickets each billing period. That can be a burden for small businesses.
So, they only offer a few games, and even then, only the $1 and $2 tickets.
People wanting more scratch-offs go across the street to Sam's Express Mart, a busy lottery outlet.
"Sometimes it drives us crazy," said Muhannad Abdellatif, who works behind the counter.
Sam's has instant scratch-offs at all prices, including the $20 games which, he says, people sometimes buy as presents.
"A holiday gift," he said.
Still, even with all the variety, the majority — about 70 percent — of his lottery business involves online games.
Playing hunches
The lottery trends in Buffalo and Erie County are evident statewide.
In most suburban and rural counties, instant scratch-off tickets are preferred.
In urban communities, online games are popular, with Queens — which has the second-biggest lottery sales of all counties, behind Brooklyn … having the highest percentage of online play, 54 percent.
What's more, when suburban areas play online games, they pick games that aren't very popular in cities, the News analysis found.
Quick Draw, for example, represents 26 percent of lottery spending in Erie County outside of Buffalo, and Mega Millions represents 12 percent.
In contrast, just 7 percent of lottery money in Buffalo was spent on Quick Draw, and less than 4 percent on Mega Millions.
Meanwhile, 40 percent of lottery money spent throughout Buffalo — in the wealthy as well as the poor neighborhoods — went to one of the Daily or Midday Numbers or Win 4 games.
"I have a hunch so I am playing my [numbers]," Stacey Bomar said while buying three $1 tickets recently at Chief's Food & Beverage.
She picked 141, 434 and 144 that day — losing numbers in a neighborhood where few hunches pay off.
ALSO TODAY: 'Tonawanda lottery players win most; Cheektowaga has the most outlets'
You can comment on this story at Inside the News, 'A dollar and a less lucky dream'
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