17TH JUN 2016 | WRITTEN BY: CHRIS SIEROTY IN LAS VEGAS
State lotteries stand out in a crowded gaming industry for several reasons, but mostly it is because they are the most widespread form of gambling in the U.S., a panel of academics said during a major five-day conference held last week in Las Vegas.
It is also the only form of gambling in the U.S. that is a virtual government monopoly.
Currently, lotteries operate in 44 states and the District of Columbia. Those states without a lottery include Nevada, Alabama, Alaska, Hawaii, Mississippi and Utah.
The Oregon Lottery, for example, is a state-run monopoly using a network of 3,939 retailers also offering some 11,925 video lottery terminals (VLTs) state-wide.
The VLTs operate similar to slot machines and account for 71.5 percent of total sales in 2015. Last year,Oregon earned $1.2bn from the state lottery.
“VLTs make sense for states looking at revenues,” Jeff Dense, a professor of political science at Eastern Oregon University, told attendees at the University of Nevada-Las Vegas’ 16th International Conference on Gambling & Risk Taking during a panel discussion entitled “The State of State (Lotteries) in 2016: American Perspectives.”
Dense admitted the machines were popular with players, but warned that a lottery expanding to include VLTs may end up “cannibalizing some other games in your portfolio.”
“There is always going to be opposition to lottery gaming,” said Dense, who presented his research titled “State Lotteries, Commercial Casinos, and Public Finance: 2016 Update.”
“The balance comes during the downtime when states need the revenue.”
Oregon’s Lottery earned $128.18 per capita in 2015, compared with Rhode Island which ranked at the very top of the list with $356.52 per capita.
But overall, states with VLTs earned $178.51 per capita compared with non-VLT states at $48.66, according to 2014 figures compiled by Dense.
Dense noted that nine states operate VLTs including Louisiana, New York, and Oregon. In total, they generated $6.2bn in revenues last year.
The figures do not include video gaming terminals in Illinois, which are operated by private route operators and overseen by the state’s Gaming Board.
Jonathan D. Cohen, a professor with the Corcoran Department of History at the University of Virginia, took a slightly different look at lotteries during the same panel discussion.
Cohen attributed their popularity to the “decline of access of social mobility” in the U.S., even though the perception remains that a higher social standing can be achieved.
His lecture was titled “Get Rich Quick: State Lotteries and the New American Meritocracy.”
“Lotteries fill that void,” Cohen said. “Lotteries are the provider of social mobility where the economy used to for more and more people.”
Addressing the question as to why people play the lottery, Cohen said his research found that the “poor play for money” while the “rich play for fun.”
But, whether rich or poor, lottery players are an older demographic, according to further research.
Richard McGowan, a professor at Boston College and co-author of the presentation “The Lottery: The engine that Drives U.S. Gaming Revenue,” said his research found the average age of a person who plays the lottery is 54.
“Twenty percent of the players purchase 65 percent of the tickets,” McGowan said.
McGowan’s research also demonstrated so-called “Sin Tax” revenues for 2014 that showed revenues for alcohol at $6.5bn, tobacco $17.7bn, and $19.9bn for casinos and lottery.
“It’s the first year that casinos and gambling have earned more than tobacco revenue,” he said.
Women In Gaming
Elsewhere at the conference and in front of a sizable audience gathered in a ballroom, long-time Caesars Entertainment executive Jan Jones Blackhurst used a keynote address to highlight the lack of women in leadership roles in the gaming industry.
To get her point across, Jones Blackhurst, executive vice president of government relations and corporate responsibility with Caesars, showed an image that she said illustrated her argument.
It was more than a dozen headshots from the executive team of a gaming company, where all except one were men.
She said she was not “picking on” the company, adding it would be the “same picture of any executive team I happen to showcase.”
Jones Blackhurst said she was trying to point out that there were not enough women in leadership roles, not only in gaming but in business in general. She said that needs to change.
“Women vastly outnumber men in the pipeline that is higher education,” said Jones Blackhurst, a former two-term Las Vegas mayor. “For years, you’ve heard companies say, ‘Well there aren’t enough qualified women.’ The statistics now show that that is just entirely inaccurate.”
She said women earn significantly less — 79 cents — for every dollar their comparable male counterpart earns.
Jones Blackhurst also took aim Wednesday at state gaming regulators, saying only very few women have ever served on either the Nevada Gaming Commission or state Gaming Control Board.
Pat Mulroy, a former general manager with the Southern Nevada Water Authority, served for one year on the gaming commission before resigning in October to join the board at Wynn Resorts.
In 1983, Patti Becker began a two-year stint on the control board, during which she led the first successful prosecution of a slot-cheating ring. Michonne Ascuaga resigned from the commission in February, less than a year after Governor Brian Sandoval appointed her.
Ascuaga resigned after it was revealed in a court filing that the Sparks Casino in northern Nevada she managed for 16 years was under investigation over non-effective anti-money laundering programs. The casino eventually paid $1m to settle the case.
“Business is better, profits are better when you have equal representation of men and women,” Jones Blackhurst said.
The gambling and risk taking conference, which is held every three years, concluded last Friday. This year’s conference brought together some 600 academics, regulators and others from around the world to the Las Vegas Strip’s Mirage.
Attendees presented research and examined various gambling-related issues at the conference, which was presented by UNLV’s International Gaming Institute.
Editor’s Note: This is just one of several stories I filed for GamblingCompliance over the last week or so about the 16th International Conference on Gambling & Risk Taking in Las Vegas. More stories are available for subscribers at http://www.gamblingcompliance.com.
Chris Sieroty 