Maine agency says lottery does not take advantage of gamblers

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A customer purchases a Mega Millions lottery ticket at a store in Damariscotta on July 8, 2016.

AUGUSTA — A watchdog agency concluded a months-long probe Friday with the finding that the Maine Lottery Commission does not target vulnerable socio-economic populations within Maine for its more than $250 million a year in sales.

The Office of Program Evaluation and Government Accountability already had a review of the lottery in Maine underway but it was on the organization’s back burner until October 2015 when the Maine Center for Public Interest Reporting published a series of articles that found, among other things, that Maine public aid recipients had claimed more than $22 million in lottery prizes since 2010. The articles also found that residents of Maine’s poorest towns spend as much as 200 times more per person than those in wealthier communities.

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The articles sparked public outcry that the system could be exploiting the state’s lowest-income citizens and caused the Legislature to refocus and fast-track OPEGA’s review. However, lottery officials and the OPEGA report say otherwise.

“It’s our conclusion that we don’t see any indication that the lottery is specifically seeking to target any demographic groups,” OPEGA director Beth Ashcroft said Friday to the Legislature’s Government Oversight Committee. “They do buy more television and radio spots in those markets that have a greater population or a greater number of viewer households. To that degree, you might say that they are putting more emphasis in certain geographic regions but that seems to make reasonable sense.”

The lottery has increased its marketing and advertising budget to more than $3 million a year since 2014 and according to the OPEGA report spends the most in the Portland marketing area, followed by Bangor and Presque Isle.

The report found that lottery sales of instant tickets and “draw” tickets such as Megabucks and Powerball topped $271 million in 2016 and that annual sales have increased 19 percent since 2014. The report attributes that increase to the introduction of a new $25 game ticket during that time period and a large Powerball jackpot in January 2016.

Winnings since 2012 have also increased from approximately $125 million a year to more than $160 million in 2016. State law says that at least 45 percent of total ticket sales must be returned to players as winnings but that the actual figure is close to 58 percent redistributed to winners.

Gregory Mineo, director of BABLO, said his organization feels “somewhat vindicated.”

“We’ve fully cooperated and we are very satisfied with what came out of this… We feel that the truth did come out,” he told lawmakers on Friday.

In its report, OPEGA recommended that the Legislature amend lottery reporting requirements to ensure that BABLO regularly publicizes its revenues, prize disbursements and other expenses. It also recommends the generation of an annual report to the governor and the Legislature. Both of those requirements are already in statute but have not been completed in recent years.

“Current management and staff at BABLO and the [Department of Administrative and Financial Services] did not provide OPEGA any explanation for not reporting,” reads the OPEGA report.

OPEGA also recommends that lottery commission meetings and decisions be better publicized.

Finance Commissioner Richard Rosen hailed the report’s findings.

“The claims leveled at the lottery ranged from the purported tripling of its advertising spending to accusations that it targets low-income communities with its advertising,” said Rosen in a written statement. “These claims had no basis in fact when they were made and I am encouraged that OPEGA’s independent review helped bring this important information to light.”

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