Is The Oregon Lottery Is A Regressive Tax On The Poor? Some Say, Yes

The Oregon Lottery celebrated a milestone according to a July 2022 report. The report showed that the lottery made a net profit of $968 million in 2021. Its highest mark since the organization started in 1984.

It’s also 33% higher than 2019’s profit, which is the second-largest year in lottery history.

Oregon Lottery spokesman Chuck Baumann said this about the milestone year:

“It’s what the mission of the lottery is, to earn a maximum profit for the state, but commensurate with the public good.”

But it’s important to consider the notion that lottery games are more widely available to Oregon gamblers in low-income areas.

Where is the Oregon Lottery the most profitable?

Multnomah County, located in eastern Oregon, accounted for three of the 10 most profitable lottery retailers in Beaver State.

A Howard Center for Investigative Journalism study revealed there are 17 lottery retailers in an area of Multnomah in which the median household income is $17,704. The county’s overall median household income is $72,425.

The top earner was the Tik Tok Restaurant and Bar. The bar is in an area where the average income is less than half compared to the county average.

The second-highest earner is Darcy’s in Wood Village, which is also in a low-income area.

Rounding out the top three is Dotty’s #24 on Hayden Island. Here, the average income is higher but tourism from Washington is high. And Oregon’s neighbors to the north prohibit video lottery games.

Studies continuously support lottery profits booming in low-income areas

Congress enacted the National Gambling Impact Study in 1996, and the group predicted the high levels of lottery gaming in poor areas.

Kitty Martz, executive director of Voices of Problem Gambling Recovery, had this to about the issues:

“We’ve always known that lotteries disproportionately impact marginalized individuals, BIPOC (Black, Indigenous, and people of color) individuals, older adults, and veterans.”

Martz also mentioned that many of the people in the groups she highlighted are recipients of government spending. Victims of problem gambling often find themselves utilizing the Supplemental Nutrition Assistance Program (SNAP). As well as Oregon’s Health Plan benefits.

“It’s an absolute redistribution of money from people who are marginalized to support these bonds to support the more privileged people of Oregon. It’s a regressive tax on the poor.”

But Baumann said the reason lottery gaming is more accessible in low-income areas is due to cheaper real estate expenses for retail shop owners. Not because the Oregon Lottery targets specific communities. He said:

“It’s going to be more expensive to have a storefront in downtown Portland than it is in downtown Gresham or the outer reaches of Portland itself.”

Oregon state relies heavily on lottery taxes

Oregon’s only source of income that’s bigger than lottery gaming is income taxes.

The state utilizes lottery income to fund:

• Public schools
• Outdoor School
• Veteran Services
• State park renovations

The Lottery also distributes funds to legislators so they can make improvements in the community.

Rep. Marty Wilde said the state’s high dependence on the lottery dollars could have a negative impact if any protective reform is implemented. As that would limit the improvement projects legislators could implement in their communities.

Wilde commented:

“Not only would we not have all those budget sweeteners in terms of lottery bond projects, but we’d probably have to subsidize the existing bonds from funds of some kind. So it really prevents us from making thoughtful decisions.”

Wilde is an advocate of calling for a moratorium on lottery bonds until a thorough investigation can be done on the impact gambling has on marginalized people. He also noted the most addicting games are also the most profitable and the games should be examined.

Wilde continued:

“I’m not anti-gambling, but I think we should have games that are more protected and don’t let people get in over their head before they realize it.”