COLLEGE PARK – In the popular imagination, the lottery is a harmless amusement in which people spend a few dollars on a Powerball ticket when the jackpot gets big.
Data journalists and reporters from the Howard Center for Investigative Journalism at the University of Maryland and from Boston University found this is not the reality. On Tuesday, the Howard Center published its findings – a five-story package called “Mega Billions: The great lottery wealth transfer.”
Increasingly powered by multinational corporations, state lotteries have become the engine of a multibillion-dollar wealth transfer that relies on spending by less-educated and less-wealthy Black and Hispanic Americans.
The project took an in-depth look at the lotteries in 45 states and Washington, D.C. Students traveled to Michigan, Kentucky, Texas, South Carolina, Massachusetts, Virginia, the District of Columbia and other states to do on-the-ground reporting.
“Because they’ve been around so long, most people take state lotteries for granted,” Howard Center Director Kathy Best said. “But our students’ reporting showed why we should pay attention to this growing, multibillion-dollar, state-sanctioned gambling industry.”
Students from the University of Maryland’s Philip Merrill College of Journalism conducted a first-of-its-kind analysis of mobile-phone location data to prove that the majority of customers at lottery retailers come from nearby neighborhoods and, using census data, that those neighborhoods are disproportionately home to Black, Hispanic and lower-income people.
They also examined marketing and advertising documents, state spending records, legislative history, federal financial disclosures and education funding formulas to follow the money from the sale of a scratch-off ticket to show who was really benefiting from that spending.
“For this project, students spent the better part of a year obtaining public records from every state with a lottery and, using aggregated mobile location data, gave us new insight into lottery retailer customers,” said Sean Mussenden, data editor for the Howard Center.
The project not only documents the wealth transfer made possible by lotteries, it examines the factors that make it possible: increasingly sophisticated advertising that is not subject to federal regulations; a lobbying campaign to create state lotteries that was often billed as grassroots but was orchestrated by the biggest lottery management firm; the growing privatization of state lotteries as states turn over the running of their games to four multinational corporations, none based in the U.S.
The project was published by Merrill College’s Capital News Service and distributed nationally by The Associated Press. Portions of the project also were published by The Post and Courier in Charleston, South Carolina, and will be run by the Austin American-Statesman in Texas. The American-Statesman also will distribute Spanish-language versions of the stories to its Texas network.
The mission of the Howard Center is to teach the next generation of investigative journalists through hands-on investigative projects. Student journalists have teamed with Merrill College's faculty and staff members to win some of the nation's top investigative journalism awards for packages that focused on such topics as climate change, lynching culture, homelessness and how companies prey on the poor. The center is generously funded by a multimillion grant from the Scripps Howard Foundation in honor of Roy W. Howard, one of the newspaper world’s pioneers.