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Iowa in bottom tier of lottery ‘suckers’

Erin Jordan, CR Gazette –

IOWA LOTTERY PLAYERS TAKE COMFORT — players in 32 other states are bigger suckers.

That’s according to the “Sucker Index” created by Bloomberg News that compares lottery spending as a percentage of annual income per adult for the 43 states that have lotteries.

In 2010, Iowa residents spent an average $110.54, or 0.22 percent of their income, on lottery tickets, Bloomberg reported.

To come up with Iowa’s “Sucker Score,” Bloomberg took the total lottery spending in 2010, subtracted total winnings and then divided the result by Iowa’s total personal income. Iowa’s Sucker Score is 9; Georgia — ranked No. 1 on the Sucker Index — is 37.

Georgia residents spent an average $470.73, or 1 percent of their personal income, on the lottery, according to Bloomberg. Only Massachusetts residents spent more — an average $860.70 per adult — but their personal incomes are higher.

Lottery revenue comes disproportionately from lower-income residents to fund state programs that often benefit the middle- and upper-class, according to a Journal of Behavioral Decision Making study.

“You’re taking from those with few means and helping those with more means,” Duke University economics professor Charles Clotfelter told Bloomberg News.

“To link that tax revenue to a benefit that goes largely to middle-and upper-class citizens is a little stunning, said Clotfelter, co-author of “Selling Hope: State Lotteries in America.”

Iowa Lottery spokeswoman Mary Neubauer disputed arguments that lotteries disproportionately tap poor people.

“Here in Iowa, the lottery had more than $200 million in sales last year,” she said. “If only poor people are playing the lottery, then they have a different definition of poor than I do.”

Eighty percent of Iowa adults have played the lottery at least once, according to Iowa Lottery research. Neubauer did not have numbers to show what share of Iowans play regularly.

The Iowa Lottery brought in about $68 million in the year that ended June 30, with about $65 million going to the state’s general fund and $3 million going to veterans’ programs.

Iowa ranked 29th in prize payback with $150.5 million awarded in 2010 for $256.3 million spent on lottery games, Bloomberg reported. Massachusetts had the most generous payouts with $3.2 billion in prizes for $4.4 billion spent on tickets. Louisiana was stingiest with $189.8 million awarded for $372.4 million in lottery tickets.

The Iowa Lottery gained worldwide attention in January when a Hot Lotto winner gave up more than $7.5 million after taxes because he or she wanted to remain anonymous.

The Iowa Division of Criminal Investigation is still investigating whether criminal charges apply in the case, Neubauer said.

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