Minnesota Lottery Expenditure, the Highest In Low-Income Neighborhoods

The 1988-established government agency that operates lotteries in the state of Minnesota, the Minnesota State Lottery, sends tens of millions of dollars to state coffers yearly. 

The money is used to fund a long list of programs, ranging from parks and education and gambling addiction services.

According to a Reformer analysis of sales data from retailers obtained via a public record request, the respective money comes from state residents in a disproportionate manner.

Namely, most of it comes from people who reside in low-income neighborhoods, which, in turn, turns the lottery into a highly regressive tax on the working class.

$275 Per Capita Lottery Expenditure in the Lowest Income Spectrum

As expected, the data has shown that, in the richest 5% of Minnesota zip codes that host households with $140,000 average earnings per year, adults do not spend more than $100 on lottery tickets per year per adult.  

The same per-capita expenditure goes up as the income spectrum goes down. The figure peaks at around $275 per adult once it reaches the bottom quartile of state zip codes.

On the other hand, in the poorest 5% of Minnesota zip codes with families bringing in $45,000 per year on average, an adult spends around $150 on lottery tickets each year.

The same expenditures are approximately four times higher in these poor communities compared to the opposite pole of the richest 5% of communities. 

According to a lottery spokesman, “buying a lottery ticket is an individual choice and entirely voluntary.” 

The representative also explained they were working “closely” with their responsible gambling partners “to promote best practices and highlight resources available for those who may need assistance.”

The data is similar to other zip code-based assessments of lottery expenditures including the ones completed in Minnesota. 

The results also align with the results obtained from various methods of analyzing the ties between lottery sales and the income of households.

More Than Half of the Adults in Minnesota Buy Lotto Tickets Yearly

According to the Minnesota Lottery’s executive director, Adam Prock, every dollar that is spent on a lottery ticket in the state is used to both fuel “the dreams of potential winners” and also drive “millions of dollars toward crucial state services and vital projects that protect our environment and natural resources.”

Little over 50% of adults in Minnesota purchase tickets at least once a year. Some of them win big. As per data from the 2020 report belonging to the Department of Human Services, around 3% of adults engage in lottery games on a weekly basis.

Meanwhile, lottery revenues have been on a steady growth path in the last few years, doubling in the period of time between the mid-2000s and today. 

The rise is, however, much smaller compared to the massive increases recorded by other forms of gambling like casino games, horse racing, and pull horse racing tabs.