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Lottery Firm Will Not Target Poor Neighborhoods

The private company chosen to manage the Hoosier lottery says it will not target low income areas in the state. For years anti-gambling activists have said that state lotteries are a ‘regressive tax on the poor.’ Although GTECH says it will not target low income areas the company will replace lottery retailers that leave its network. GTECH’s approach in Indiana is similar to the one the company adopted in Illinois Company officials said that they wound up with one less lottery retailer in poor neighborhoods.

Lottery critics say that GTECH’s failure to supply information about the zip codes the company is targeting coupled with a heavily redacted business plan suggests the company has something to hide. Indiana State Senator Brent Waltz said “I can’t imagine any kind of trade secret that would be disclosed by saying which ZIP codes they plan to target. I would bet a week’s pay those ZIP codes would line up with some of the most disadvantaged ZIP codes in Indiana. The only reason I would want to hide that is if it was something that from a public relations perspective is very damaging.”

In October Rhode Island based GTECH won the contract to manage daily lottery operations in Indiana. The company says it plans to aggressively expand the number of Indiana lottery retailers as part of a plan to increase lottery revenues by $500 million over the next five years. Some of the stores GTECH intends to target include Dollar General, Family Dollar, Dollar Tree and Wal-Mart. GTECH’s business plan contains a section titled “Retailer Penetration Targets by ZIP Code.” The section says that increased advertising “is critical” but dollar figures have been redacted.

In November William Zielke, chairman of the State Lottery Commission, told reporters that GTECH would not target areas where the average income is below 60% of the state’s median income. GTECH spokeswoman Angela Wiczek said “The whole goal is to not increase in those areas.” Wiczek told reporters that the company does plan to replace retailers in areas that stop selling tickets. GTECH employed a similar strategy in Illinois. A newspaper analysis found that GTECH attracted over 230 new retailers in neighborhoods with incomes less than 60 percent of the state average. The figures represent than 20 percent of the 1,143 new retailers GTECH added.

GTECH’s Wiczek said the company is committed not to target areas where the average income is $30,000, or about 53 percent of the Illinois average.  Geoff DePriest, director of business plan compliance for the Hoosier lottery estimated that 6% to 7% of lottery retailers are located in areas where income is below 60 percent of the state median.

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