State lottery ad tells gamblers half the story – Herald Democrat

By Vanessa G. Sanchez, Shannon Clark, Victoria A. Ifatusin, Zoe Pierce, Shreya Vuttaluru, Rachel Logan, Aadit Tambe Howard Center for Investigative Journalism | PA

HOUSTON (AP) – The sign at the SHOP N Go counter reads “WE SOLD $10,000 WINNER!!”

Located in a Hispanic neighborhood, the store sells Texas Loteria, a popular game marketed by the state lottery that resembles the iconic bingo lottery game in Mexico.

The sign and the game attract players like Manuel Constancia, who said he buys the scratch lottery tickets at SHOP N Go almost every day.

The 50-year-old landscape worker had just bought five $5 Texas Loteria tickets, but said he hadn’t won anything. He said he often bought the $50 tickets and lost enough to run out of rent and food “several times.”

Yet he always comes back.

“I feel that in the next post I can become a millionaire,” he said.

State lotteries spend more than half a billion dollars a year on pervasive marketing campaigns that deliver a similar message of hope, designed to persuade people to play often, spend more and overlook the long odds. to win.

A Texas Lottery internet advertisement tells players they can “unleash the power of luck” by purchasing $20 scratch tickets.

A sign outside a New Jersey supermarket urges passers-by to ‘Give your dreams a chance’.

A YouTube video reminds players in Virginia that they can win more if they bet more.

A Michigan phone app sends alerts “reminding you to buy tickets ahead of the draw.”

The investment paid off for lotteries. For every dollar spent on advertising nationwide, they made about $128 in ticket sales, according to an analysis of lottery data by the University of Maryland’s Howard Center for Investigative Journalism.

But behind this success are millions of people like Constancia. For every dollar players spend on the lottery, they will lose about 35 cents on average, according to the data. For many, the losses amount to thousands or even tens of thousands of dollars over time.

This is not a statistic announced by lotteries, and they don’t have to. As state agencies, they are exempt from Federal Trade Commission regulations that prohibit misleading and deceptive advertising.

“The FTC doesn’t regulate state lotteries because they’re state-regulated, but more importantly, we don’t regulate them because they’re not interstate commerce,” a carrier said. word of the committee.

That leaves oversight of advertising to state legislatures that rely on lottery revenue to help balance their budgets.

The conflict of interest has hampered efforts to curb advertising, such as a 2020 bill a South Dakota lawmaker introduced to ban lotteries from promoting their games over fears they could be addictive. He failed to walk out of the committee after a state official testified that he would cut the flow of lottery money for education expenses by $1 million.

“It troubles me to see how the state promotes gambling while running ads warning people about opioids, crystal meth, tobacco, and all the other addictive habits that people may be susceptible to,” the rep wrote. state John Mills, a Republican who sponsored the bill. in an email.

The government’s reliance on gambling funds also puts pressure on lotteries to pursue “new marketing, brighter colors on scratch tickets, whatever to keep people coming. , because otherwise the numbers go down,” said Les Bernal, national director of Stop Predatory Gambling, a Washington, D.C.-based nonprofit advocacy group.

The impact of aggressive marketing is particularly profound on low-income black and Hispanic populations. Studies have shown that they spend more on lottery games than other groups.

The Howard Center found that stores in the vast majority of states that sell lottery tickets — 45 states, plus Washington, D.C., have lotteries — are disproportionately concentrated in communities with varying levels of education and income. lower and higher poverty rates, with larger populations of Black and Hispanic people.

“They feed on people’s hopes,” said David Surdam, an economics professor at the University of Northern Iowa. “They think their chances of ever having real prosperity are pretty slim and the lottery may be the only hope they have.”

Lottery agencies may post “play responsibly” messages and winning odds information in their advertisements and on their websites.

But most participants in a 2021 study at the University of Memphis had trouble finding or remembering odds-of-winning statements on scratch tickets and only 20% interpreted them correctly.

Another 2021 study, conducted by researchers from Rutgers University’s Center for Gambling Studies, found that most lottery websites urged players to gamble responsibly, but information on what that means was ” inconsistent and rare.

The Howard Center analyzed state lottery annual reports, advertising campaigns, and marketing plans obtained through public record applications and found that they frequently promote the risky behaviors that their gambling messaging responsible discourage.

In the latest annual report available on its website, the Connecticut Lottery touted its ad campaign urging players to use common sense.

One of the campaign ads, “Myths”, shows someone circling 15 on a calendar with “birthday” written underneath, then writing 15 on a lottery ticket. A ball with the number 39 falls in the following image, followed by a written message: “Using special numbers does not change your chances. Avoid common myths about the game. The eight-second spot had less than 100 views in early May.

The video appears on the Connecticut Lottery’s YouTube channel along with “Indelible Numbers,” a 30-second video that sends the opposite message. This ad follows a couple from their meeting, their wedding, their first home and the birth of their child. Through advertising, numbers are extracted from these significant events to form a pool of five numbers which they use to fill out a Cash 5 lottery slip.

“It’s not just any numbers, it’s your numbers. Play them today and every day,” says the narrator.

This video has had over 3,700 views.

A small “Gamble Responsibly” link at the bottom of the Virginia Lottery website leads to this statement: “At the Virginia Lottery, we encourage friendly competition and responsible gaming. We are committed to presenting all Virginia Lottery products in the most responsible and ethical manner. »

But a Virginia Lottery ad on its YouTube channel encourages players to play Cash Pop, “an exciting new game,” five times a day with separate “coffee break” and “lunch break” draws. , at “rush hour”, at “prime time”. and “after hours”.

The video then shows how players can bet up to $10 per number and up to 15 numbers per draw. He fails to mention that the cost of following these suggestions would be $750 per day.

The odds of winning the $2,500 top prize, “1 in 15,000”, appear briefly in small print in the last image.

Lottery advertising plans also show that online lotteries give state lotteries the ability to track players and target them more directly.

The Michigan Lottery’s 2019 Marketing Plan details how using device-level data helped tailor push notifications to “increase engagement and improve player retention with a seamless experience by delivering the right message , at the right time on the right platform”.

“Whether it’s an app download, app open, message open, location update, cart abandonment, or app uninstall, having the ability to respond behavior of the player at this level will ensure better acquisition and retention,” the plan reads.

The marketing plan includes the development of a ChatBot that reaches customers through AI-powered conversations as “a crucial next step in increasing player engagement.”

Lottery officials from Michigan, Virginia, Connecticut, New Jersey and Texas contacted for this story either did not respond or declined to discuss their marketing campaigns. David Gale, executive director of the North American Association of State and Provincial Lotteries, referred questions about industry practices to state lottery agencies.

Texas lottery opponents won a provision of the 1991 law that created the lottery, prohibiting advertisements or promotions “of a nature that improperly influences any person to purchase a lottery ticket.”

But efforts to enforce it have failed. A bill to ban the lottery from advertising in counties with a per capita income below 150% of the poverty level and another to ensure advertising does not target any specific demographic have both failed.

The Howard Center analysis, based on 2020 data, found that census tracts in Texas with lottery retailers, like the one where Constancia buys her tickets, had larger Hispanic populations and higher levels of poverty. . And the lottery’s own study in 2020 found that Hispanic players outspent players from any other demographic by 30% on lottery games.

The Texas Lottery Commission, the agency that oversees the lottery, has adopted certain safeguards. Its advertising “sensitivity” policies require marketing agencies to design campaigns that “do not exploit any specific person, group or economic class”.

Still, the commission has made its Texas Loteria scratch games the centerpiece of a four-year, $3 million marketing campaign to boost its brand and sales with a particular focus on “ethnic markets,” according to sources. documents obtained through a request for documents.

The lottery initially introduced them as $3, $5, and $10 scratch bonuses. But starting in 2018, it added two $20 Loteria games and, most recently, a $50 version — one of the most expensive games on the Texas market today.

LatinWorks Marketing LLC, a company specializing in advertising campaigns that tap into the growing Hispanic market, won the sales promotion contract. The company, now called Third Ear, offered to hire a Hispanic and non-Hispanic influencer to bypass ad blockers and reach both groups.

In the first year of the campaign, sales of Million Dollar Loteria, Mega Loteria and Super Loteria scratch tickets exceeded $540 million, contributing to a record $4.85 billion in scratch ticket sales, according to a 2021 Texas Lottery report.

In an email, a spokesperson said “The Texas Lottery declines to participate in this project, either conducting an interview or responding to written questions.”