Panel studies gambling growth Commission will offer suggestions to Congress on lottery advertising


WASHINGTON -- Using clever marketing and aggressive promotion, lotteries have become the most visible form of gambling in America, as states trade Monopoly-like dreams for $35.8 billion in citizen income.

State governments spend $378 million a year trying to convince people that a lifetime of riches might be as near as a dollar and a splash of luck. But how far should states go when the odds of winning a jackpot are so extreme?

This week in Boston, the National Gambling Impact Study Commission will hear from lottery experts about who plays these games of chance and the role of advertising in getting people to play. The panel is studying the growth of gambling and will make recommendations to Congress.

There have been no federal restrictions on lottery advertising since Congress lifted a ban on television and radio lottery ads in 1975. Although the commission does not have the power to create laws, some state lottery officials are concerned that a negative report could lead to greater controls over how contests are sold.

The last time a federal panel looked into gambling -- in 1976 -- it called for the Federal Trade Commission to oversee lottery advertising if states went too far in encouraging people to play. Nothing ever happened.

"Lotteries need to advertise to raise money to support government services," said David Gale, executive director of the North American Association of State and Provincial Lotteries. "States would be hard-pressed to replace that money if lotteries were somehow not in existence or could not advertise effectively."

Lotteries compete with other entertainment activities for cash, Gale said, so states have to be just as sophisticated at advertising as the private sector. But Gale acknowledges that states have more responsibility to warn of the risks involved in gambling and of the odds.

In Indiana, one newspaper ad for the Hoosier Lottery's "daily Millions" teases: "You could win the top prize of one MILLION dollars in cash, all at once, EVERY DAY of the week!"

The odds that someone in Indiana will actually win a million dollars are 1 in 9.2 million, four times higher than the chances of being killed by lightning or a bad tumble out of bed.

A survey by La Fleur's Lottery World, an industry publication, discovered that of the 37 states and the District of Columbia that hold lotteries, only Minnesota, Virginia and Wisconsin have advertising guidelines written into law.

A Minnesota law requires all ads to have a prominent statement about the odds of winning. The state prohibits ads that target an economic class or religious holiday, or tout the lottery as a financial investment. Virginia law bars spending where the "primary purpose" is to induce people to play, while Wisconsin limits "promotional advertising" beyond basic contest and revenue information. Other states voluntarily follow rules against ads featuring children or portraying lottery riches as an alternative to work. Americans spend nearly $158 per person a year on lottery tickets, enough to persuade 35 states with lotteries to include some type of warning or referral service for problem gamblers on promotions.

Richard McGowan, a Boston College economics professor who has studied lotteries, said a combination of state-sponsored advertising and jackpot hype in the news media can make even the most ridiculous odds look tempting. "The odds of winning are so slim," he joked, "you probably have a better chance of winning one of those Ed McMahon sweepstakes."

Pub Date: 3/16/98

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