Las Vegas Sun

March 28, 2024

Poor take a chance on lottery at check cashers

CAMBRIDGE, Mass. -- Zeituni Onyango is out of work and doesn't have much money. But every now and then, she succumbs to temptation and buys a lottery ticket at the check-cashing store.

"It's just like when I feel luck might fall I do that, like manna might come from heaven. That's when I buy it," the 49-year-old woman said recently after a visit to a check-cashing store in the Central Square neighborhood.

She's not alone.

Check-cashing stores, which critics say target those lower-income people who don't use banks, sell millions of dollars of lottery tickets around the state each year.

And that practice raises questions, for some, about whether the state is selling tickets to people who can ill afford it.

"I really question the logic of having it placed in check cashing stores," said Rep. Barbara L'Italien, D-Andover, a lawmaker who has opposed expanded gambling in the state. "My feeling about gambling in general ... is that it's a really regressive form of taxation that really preys on our poorest citizens."

"My opinion is it would be sending the wrong message to people," said Roger Swagler, a professor of consumer economics at the University of Georgia who has studied the use of check-cashing stores and other alternative financial services by lower-income people.

"If you went into your bank, you'd be pretty surprised to see somebody selling lottery tickets at the bank -- surprised and annoyed, I would think," he said.

Massachusetts State Lottery Director Joseph Sullivan said people bought the tickets voluntarily as a form of entertainment. He emphasized that lottery proceeds go toward the budgets of the state's cities and towns, and that most of the people who buy lottery tickets can afford them.

"The fact is that the lion's share of these people are average men and women who have disposable income and they select the way in which they spend their money. ... We have players in all walks of life who get excitement from the games and there are many winners every day," he said.

State banking regulators have issued 88 check-cashing licenses to stores around the state. The licenses are required when anyone charges more than $1 to cash a check. In the 2002 fiscal year, 61 of those licensees sold more than $32 million in lottery products, according to an Associated Press review of state lottery records.

About half of the licensees were stores that listed themselves as check-cashing establishments. The rest of the licensees included liquor and grocery stores that allowed people to cash checks.

Lottery records also indicated that two pawn shops -- typically places of last resort for the cash-strapped -- were licensed to sell lottery tickets.

The sales at check-cashing outlets are just a small part of statewide lottery sales, which rose to $4.2 billion from over 7,300 locations in fiscal 2002. That's an average of more than $650 spent on the lottery for every person in the state annually.

Dave Backman, general manager of Boston Check Cashers, which sells lottery tickets at most of its 20 Boston-area outlets, defended the sales, saying the company was merely doing what many other stores do.

"Our lottery sales are very low, first of all," he said. "And I don't understand why there'd be any difference between a check-cashing store selling lottery than a liquor store or any other business."

Check-cashing stores charge a fee for their services, and there's no limit on the amount they can levy in Massachusetts. Check-cashing stores must be licensed and post a schedule of their fees with the Division of Banks and Banking.

Research indicates that people who use the stores typically have incomes from the high teens up to $30,000, according to Swagler, the University of Georgia professor.

Kathy Scanlan, director of the Massachusetts Council on Compulsive Gambling, said, "We're always concerned about gambling that targets the most vulnerable. ... The folks that you're describing seem to fall into that category."

Kevin, a spokesman for Gamblers Anonymous who asked that his real name not be used because he is a recovering gambling addict, said lottery tickets shouldn't be sold at check cashing stores where large amounts of cash are placed in the customer's hands.

"It gives the gambler too much incentive to buy scratch tickets," he said. "Gamblers don't care about the future. They just want the present. If they want to gamble, they'll do anything to get scratch tickets."

Inside Onyango's store in a bustling neighborhood on a recent spring Saturday, lottery slips were available on the side counter, and rolls of scratch tickets were visible hanging behind the tellers.

Onyango, who had just left the store, said she had been having health problems and was out of work.

"It's difficult to get money here. It's not easy at all," she said.

She may be tempted sometimes, she said, but she said she wasn't going to waste much money on gambling.

"I'm not crazy for it," she said. "I end up losing my money. ... The more you win, the more you want to play, and the more the money goes back."

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