Legislators to scrutinize lottery oversight, ad tactics

AUGUSTA – The legislature’s Government Oversight Committee sharpened its pending investigation of the Maine lottery on Friday, voting unanimously to assess the lottery’s marketing techniques and impact on poor regions of the state.

Earlier this month, lawmakers accelerated the lottery investigation, but tasked the legislature’s independent investigative arm, the Office of Program Evaluation and Government Accountability (OPEGA), with refining its scope.

“What does the Maine State Lottery consider when making decisions about games to be offered and how they will be marketed?” said OPEGA director Beth Ashcroft, outlining the new goals of the study. “Are any particular demographic groups or regions of the state specifically targeted in the lottery’s advertising and marketing? Who has responsibility for overseeing those decisions?”

The investigation will also assess oversight of the lottery and determine how winning a lottery prize may affect a person’s eligibility for public benefit programs, such as food stamps or MaineCare.

Lawmakers Friday insisted OPEGA also request and review all of the documents that guide the lottery’s marketing and advertising strategies, including some considered “business confidential” and shielded from public scrutiny.

“It seems to me we need to understand what those techniques are,” said Sen. David Burns, R-Whiting. “These questions are pretty easily answered if the information is forthcoming. If it’s not, it will be a whole different issue.”

Marketing plans considered confidential

To date, documents detailing the lottery’s marketing tactics have not been disclosed.

The Maine Center for Public Interest Reporting first requested the lottery’s annual marketing plan, as well as documents guiding social media strategy and public relations, under the state’s open records act on June 5, 2015.

At the time, Department of Administrative and Financial Services spokesman David Heidrich said the lottery’s contract with Boston-based ad agency Fuseideas, signed in February 2015, was “relatively new” and that the “items had not been requested.”

The Center filed another records request for the same marketing plans six months later, on Dec. 8, 2015, but the department has yet to provide the documents.

Lottery officials said in an interview in July that marketing strategy plans from prior years, under previously contracted advertising agencies, were also unavailable.

In addition, hundreds of pages describing the marketing tactics used by Scientific Games, a Las Vegas-based multi-national company that holds a contract to operate Maine’s lottery, are shielded from public scrutiny and labeled “confidential information.”

“It’s not just as easy, potentially, as looking at a contract,” said Ashcroft. “We don’t know what role, if any, Scientific Games has in marketing decisions. But I am assuming we will be able to get hold of whatever contract speaks to marketing and advertising for the lottery.”

Disproportionate impact on poorer communities

Legislators of both parties began calling for increased transparency and oversight of the Maine Lottery following a 2015 Maine Center for Public Interest Reporting series called “Selling hope to the hopeless” that found lottery ticket sales in the state’s poorest towns were as much as 200 times more per capita than sales in wealthier areas. It also found that lottery sales jump by 10 per cent for every one percentage point increase in unemployment across the state.

Research conducted in Maine by Cornell University behavioral economist Dr. David Just, at the request of the Maine Center for Public Interest Reporting, has shown that people who have recently suffered a “shock” of some kind — unemployment, for example — are more likely to play.

The Center subsequently found that people receiving public benefits, such as food stamps, aid for needy families or Medicaid, have likely spent hundreds of millions in lottery tickets over the past five years, enough to take home at least $22.4 million in prizes over $1,000 since 2010.

Those revelations sparked an outcry among legislators of both parties, who said rules should be adopted to prevent people from purchasing lottery tickets with public benefit dollars.

In a radio interview last week, Gov. Paul LePage said he believes the Maine State Lottery “absolutely” targets the state poor and that if legislators passed a bill to end the lottery, he would sign it immediately.

Lottery officials deny their advertising specifically targets poor towns or counties. The lottery advertises primarily at the stores where tickets are sold and on television and radio, so an advertisement in Caribou is likely to be the same as one seen in Kittery, they say.

Lawmakers Friday emphasized the legislative investigation should examine lottery sales data to determine whether or not Maine’s poor play more than wealthier demographics.

“Who ends up spending their money on lottery tickets?” asked Sen. Chris Johnson, D-Somerville. “I think it’s an important thing to know that predominantly poor citizens are in fact the ones buying out of desperation.”

The Office of Program Evaluation and Government Accountability study of the lottery is due to be completed by mid-2016.

Dave Sherwood is a contributing writer to the Maine Center for Public Interest Reporting, a nonpartisan, non-profit news service based in Augusta. Email:pinetreewatchdog@gmail.com. Web: www.pinetreewatchdog.org.

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