An Itch You Can’t Scratch-Off

Signs advertising winning lotto tickets at a cigarette and cigar shop in Catskill, New York.

An Itch You Can’t Scratch-Off

All over the country, there are people who can’t stop spending money on state-run lotteries—and their states are doing almost nothing to help them.

Adam Osmond lived and lost the American dream by gambling on lottery tickets that often promise to take players from rags to riches.

In 1984, at the age of 17, Osmond came to the United States from Somalia to attend Central Connecticut State University, a college in New Britain, Connecticut. While in school, he worked at a local convenience store part-time, eventually moving up to store manager. Back then, scratch-off lottery tickets in the state typically cost $1, so Osmond would play them at work every so often for fun. “I’m always into numbers,” says Osmond, who liked playing tickets that let him select different combinations of digits.

After graduating from college, Osmond became an accountant for the state government, but he also wanted to pursue being a business owner on the side. He bought his first convenience store in 1998, the same year his first daughter was born, and later acquired a gas station with a store, both located near his alma mater in the snowy, quiet New England town.

Osmond is clearly a businessman. He comes to our meeting at a Dunkin Donuts, not far from his former stores, dressed in a blue-and-white-striped collared shirt with French cuffs, gray slacks, and brown dress shoes, holding a legal pad in a leather case. His dark hair, showing some signs of graying, is close-cropped, and the walnut skin of his face is cleanly shaven. It was when he owned his own businesses that his lottery playing changed and, eventually, became a problem. By the late 1990s, when he had already bought his first store, the price of tickets was going up: scratch-offs could go for $10 or even $30, with the lure of bigger winnings. After he bought the store in 2002, Osmond started playing more, purchasing tickets at his own stores. “The more I play, the more [I wondered], ‘What if I win?’” he recalls.

State-sponsored lottery was first instituted in the United States in New Hampshire in 1964, but that was a weekly phenomenon that functioned more like a raffle than a gambling venture. Players had to give their name and address to purchase a ticket, and the state didn’t invest in advertising the game. A handful of other states joined New Hampshire by instituting lotteries during that decade and the next; Connecticut added its own in 1972. But then states realized lotteries could be a source of revenue, and growth exploded during the economic upheaval of the 1980s. Today all but six states—Alabama, Alaska, Hawaii, Mississippi, Nevada, and Utah—run a lottery.

A man purchases scratch-offs at a beer store in Catskill, New York.
Scratch-off lottery tickets displayed at a convenience store in Catskill.

In 2004, Osmond won $3,800, which was then his highest jackpot ever. After that, “it got really bad,” he says. He began playing almost daily. He switched to different kinds of tickets, called Play 3 and Play 4, which let a player pick a set of numbers. The drawings were twice a day instead of daily or weekly, giving him instant gratification. The immediacy with which the games concluded, and the big payouts that could follow, only made things worse. “The worst thing that happens to any gambler is when you hit something big,” Osmond explains. “Whatever I win, I would play more.” In 2007, Osmond won two $25,000 payouts; he had plowed those winnings back into new tickets within a week. Soon, he started pouring all of his money—his entire income, plus any money he won playing the lottery—into lottery tickets. “Every penny that I won and every penny that I earned was going to it,” he says. Eventually, he was gambling over $20,000 a week, playing “nonstop.”

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It wasn’t about the fun of playing numbers like his daughter’s birthday or his anniversary date. “It’s not even about the money,” he adds. “It’s about being in the action … it makes you high.” Losing made Osmond want to play more, to achieve the next win. Each time he won, his mind would tell him, You could win more. Why stop now? And, of course, his businesses gave him instant access to more tickets.

“It’s like an alcoholic owning a bar,” Osmond says. “I [owned] my own little casino.”


Adam Osmond outside the storefront that once housed his convenience store, in New Britain, Connecticut.

There has been little research examining lottery addiction specifically. But, in a detailed 2017 study of gambling in Massachusetts, University of Massachusetts public health researchers found that while just 2 percent of adults have a gambling problem, the numbers are higher for people playing the lottery, particularly games that provide instant gratification. Traditional lotteries like Powerball have a problem-gambling rate of 3.3 percent, while for instant-scratch games it’s 4.4 percent, and for daily games like Keno, it’s 7.6 percent.

Nearly two-thirds of Massachusetts adults play the lottery in a typical year, but for people with gambling addictions, the numbers are much higher: about 95 percent of problem gamblers play it. (Overall, the study found that between 83,152 and 135,122 adult residents are problem gamblers and between 389,776 and 488,519 adult residents are at-risk gamblers.) These frequent—some compulsive—players are where the real state money lies. “The casual player that might jump in when the Powerball is big—they’re irrelevant to the revenue model,” says Les Bernal, national director of the nonprofit Stop Predatory Gambling, adding that state lotteries “make their money on the highly repetitive games.” Such “core” players are only about 10 to 15 percent of all people who play the lottery, but account for 80 percent of sales.

The lottery industry disputes that problem gambling is a prevalent problem, or that revenue comes from a concentrated group of players. “People from all walks of life and all income levels play lottery games,” says David Gale, executive director of the North American Association of State and Provincial Lotteries, which represents 52 state and provincial lottery organizations. Citing “sales at over $85 billion in 2018,” Gale argues that “the lottery industry could not achieve sales of that magnitude by focusing on a small set of players.” He also contends that the availability of lotteries to the general public has not increased problem gambling.

Addicts say otherwise. Osmond notes that he wasn’t the only person feeding a gambling compulsion via the lottery in his stores. “A lot of my customers had the same problems,” he says. “A small percentage of people [were] responsible for all the sales.” That core group, he explains, would come in every morning, buy tickets, then return to buy more at lunch—“and I was the biggest one.”

A counter where customers can fill out Keno tickets, at a gas station in Danbury, Connecticut.

Osmond knew he had a problem by 2005, but he kept his addiction a secret from his wife and children. “No one knew anything about it,” he says. The only people aware of his issue were officials at the Connecticut Lottery, who met with him in February 2008 after his stores’ high sales and payouts raised concerns. They asked if he had a lottery addiction, but he told them no, not wanting to admit that there might be a problem. They let him continue running the lottery out of his stores. “As long as I was paying them every week, they were very happy,” he says. After all, Osmond’s stores were the biggest source of lottery sales in his entire region.

By the summer of 2008, he says, his addiction “affected everything” in his life. At that point, Osmond’s health had started to decline, and he wasn’t eating well or taking care of his businesses. His stores’ sales floundered.

It wasn’t until six months after the first meeting with Connecticut Lottery that the state stepped in and cut off his machines. He had started printing tens of thousands of tickets without cashing any of the winning ones. “I just wanted to get caught, and I wanted them to shut down the machine,” he explains.

The loss of his lottery machines was the turning point when he finally realized he needed help, and he told his wife what had been going on. He went into treatment and started attending meetings of the 12-step program Gamblers Anonymous. The state wanted to collect on all the lottery tickets he had printed, so he had to declare bankruptcy. His family was forced to move after he couldn’t pay the mortgage on their home. “I wouldn’t wish anybody to go through what I went through,” he says. “That was the toughest time in my life.”


A woman checks her scratch-offs at a grocery store in Kingston, New York.
A woman plays her lotto tickets at a laundromat in Catskill.

State governments that rely on lotteries for revenue have a clear goal: increase the money they make off the cut they take from each game played. Achieving this goal often means getting more people to play or extracting larger sums of money from dedicated fans. “An enormous amount of their profits comes from people who are addicted,” Bernal says.

Because lotteries are state entities, they are exempt from federal truth-in-advertising regulations. One 2013 campaign in New York featured piggy banks with the tagline “multiply your money.” Another ad that ran in Chicago’s poorest neighborhoods in 1995 promised, “This could be your ticket out.” While the odds vary from game to game, lottery players, like most gamblers, are more likely to lose than to win. But most ads for state lotteries focus on the size of the prizes, not on the low odds of winning.

The perverse incentive for states to maximize gambling profits is the opposite of what people expect from their government—which is tasked, at least in part, with protecting public health and discouraging addiction. Yet states are generally making problems worse, not better. Traditional lottery games involve long intervals between the time people place bets and when they discover whether or not they’ve won. When people fill out a Powerball or Mega Millions ticket, they have to wait a few days to realize any wins—something which Keith Whyte, executive director of the National Council on Problem Gambling, which advocates for services to help people with gambling addictions, says is associated with lower rates of problem gambling.

“It’s like an alcoholic owning a bar. I owned my own little casino.”

But, according to Bernal, though they often get the most press—with Mega Millions jackpots in the hundreds of millions making regular appearances in newspapers and on the nightly news—these kinds of games aren’t the “primary source” of most lottery addictions. Instead, states have expanded into games that offer instant rewards. To get more money from scratch tickets, states like Texas have made individual ticket prices higher while increasing the rates of payout; some tickets cost as much as $50 each. “We call it ‘juicing the ticket,’” Bernal says. This plays directly into the kinds of things that are associated with gambling addiction, per Whyte: speed of play, instant reward, and large jackpots.

A higher payout sounds like a good deal until it becomes clear that the most frequent players, like Osmond, simply put winnings back into buying more scratch-offs. “Gambling can act like a narcotic,” Whyte explains. “Many gambling addicts develop tolerance: you need to bet more and more money to achieve that same high.” So they keep betting more and more money, including the proceeds from their wins, to get that rush. Others chase their losses, funneling wins into plays in an effort to make back all the money they’ve lost.

“I’ve had some lottery addicts in particular describe a big win as depressing or infuriating,” Whyte says. “They only walk away when they don’t have any more money to play. A big win just means they stay there longer.”

A television that shows the video Keno numbers being drawn, at a pizzeria in Connecticut.
Keno tickets at a pizzeria in Connecticut. Numbers are drawn every four minutes for video Keno.

State lotteries are also moving further and further into what amount to video games or casino-style games. In some places, lotteries run video terminals, taking a cut the same way they do with tickets. In bars and bowling alleys, people in New York can be found playing screen-based games like Quick Draw and Keno, which select winning numbers every four minutes. Oregon runs video-game terminals that look and act like poker and other flashy, colorful games usually found in casinos. “You’re in the zone,” says Bernal. “You keep pressing that button over and over and over again.”

Now states are pushing into online and app-based games. These new games typically require legislative approval, but it’s already happening in some places like Michigan, which offers online games on the state lottery website that are essentially virtual scratch-offs. This includes “Wizard of All,” which is designed to look like Harry Potter, and “Gem Blaster,” which looks like Candy Crush. “Younger people aren’t [playing] lottery games, which is why they’re pushing to bring it online,” Bernal explains. “They put Las Vegas on Main Street, now they’re trying to bring Las Vegas into every home, every office … right into your living room.”

But online games are not likely to goose lottery revenues the way states might be hoping. Rather than new forms of gambling bringing in new players, “it’s usually substitution from other types of gambling activities,” says Lucy Dadayan at the Urban-Brookings Tax Policy Center. If people start playing online games, they’re just spending less on scratch-offs. The same players just keep playing.


A scratch-off display in Albany, New York.

Lotteries have a body count. While it’s difficult to differentiate lottery players from other gamblers—they often overlap—those who suffer from problem gambling have an attempted suicide rate between 17 and 24 percent, which the National Council on Problem Gambling says is the highest rate among addicts of any kind.

Ronda Hatefi was always very close to her brother Robert, whom everyone called Bobby, throughout their childhood in Eugene, Oregon. “We were more like twins,” she recalls. Bobby, the fourth of five children, was the funny one, always trying to do things for others. That desire to help other people eventually turned into a love of money, which he could use to buy people gifts. “He was very money-oriented and conscientious about it,” she explains. He was also obsessive and compulsive: pouring quarters into arcade games until he won, unable to walk away.

Bobby bought his first lottery ticket when he was 18 years old; he won $500. He kept playing, buying tickets or playing Keno machines. Then, in the early 1990s, Oregon released video lottery terminals, and Bobby started playing them. “Those machines are designed to addict you,” Hatefi says. “They have sights and sounds and smells, even, that come out of them to attract different people … video lottery takes your money so fast, and it’s a continual game.”

When he graduated from high school, Bobby started making good money working at a steel mill in Portland, but his shift didn’t start until 3 p.m. So he spent the earlier part of his days at a bowling alley, playing the video lottery. “It didn’t take very long before it wasn’t just a few minutes, but a few hours,” Hatefi says. “It just soon became something that he wasn’t really able to control.”

Quick Draw (and golf) play on the TVs at a laundromat in Catskill.

Bobby started asking family members for money, saying he didn’t have time to get cash for lunch or to fill up his car. “Because we knew him as this money-conscious person, all of us would loan it to him,” Hatefi says. But then his family caught on, realizing he’d been asking everyone for cash, and began refusing his requests. So he found other sources. He took money from his nieces’ and nephews’ piggy banks. He sold belongings, including a ring with a family stone in it. “Whatever he could find, he was selling,” Hatefi says. A local 7-11 started fronting him his paycheck.

At one point, deep into his addiction, Bobby told his mother that he couldn’t understand what was happening to him. “I'm being told this is entertainment, this is supposed to be fun for me, but I can’t enjoy it,” Hatefi recalls Bobby saying to their mother. “I don’t understand why I can’t stop thinking about it. I can’t turn my brain off.” Hatefi’s mother tried to help her son by taking him to a counselor. But the counselor admitted she didn’t know how to treat a gambler, and treated him instead for depression, giving Bobby Prozac and telling him to find a hobby.

One weekend in July 1995, Bobby told his family that he was going to take his gun to go hunting. Later, Hatefi’s phone rang: it was her other brother, EJ. “I knew at that moment he was gone,” she says. Bobby, just 28, had taken his own life in his apartment in Portland. In the note he left behind, he said he felt like a ghost, and just wanted to be invisible; that he didn’t deserve the love and support of the people who cared about him. “He didn’t know how else to make it stop,” she says.

A Keno player in Danbury shows off the $4 winnings she got from $6 worth of tickets.

Though Hatefi’s mother was convinced from the outset that her son’s death was related to his gambling—even writing on his death certificate, “Suicide thanks to the Oregon state lottery”—Hatefi needed more convincing. “I couldn’t believe that something like a machine could be more powerful than the love of family,” she says. She spent time in the years after Bobby’s death speaking with addicts and attending Gamblers Anonymous meetings in order to understand the addiction that had tormented her brother. “The more I learned, the more it fueled me to do more,” she says.

Bobby would now be 52 years old. Since his death 24 years ago, Hatefi has become a vocal advocate for raising awareness around gambling addiction, eventually establishing September 29—Bobby’s birthday—as Problem Gamblers Awareness Day. “I’ve seen this addiction destroy families financially and emotionally,” she says.

States with lotteries “are asking people to sacrifice themselves for the benefit of others,” Hatefi adds. “To me, he was everything. It wasn’t worth any amount of money that the state brought in.”


A video lottery monitor at the front desk of a laundromat in Catskill announces the day’s Powerball jackpot.
The interior of a laundromat in Catskill where customers can play video Quick Draw.

About that money. Lotteries are often established when the economy is suffering and state governments cast about for sources of revenue. Officials usually sell the public on starting or expanding lotteries by saying that the money will be earmarked for important public goods—most commonly education, but also other services like mass transit or environmental conservation.

But on top of the harm brought to families like Hatefi and Osmond’s, those promises are a bad bill of goods. Across all states and localities, lotteries brought in just $17.7 billion in 2015, according to an analysis by Urban-Brookings researcher Dadayan. That may sound like a lot of money, but in 2017, states’ total revenues came to over $2.5 trillion. Lottery revenues also don’t grow much over time. In 2008, they were $17.4 billion, adjusted for inflation, meaning they grew less than half a billion dollars over the span of nearly a decade. (Revenues actually fell in 21 states.) Even as the number of states with lotteries has steadily increased since 1979, the real growth rate in lottery revenues has fallen.

Part of the reason lottery revenues don’t increase is that states get a set amount from each game played, and the number of people playing doesn’t tend to increase year after year; it’s a fixed number of people, and a fixed pot of money. “At the end of the day, we know that revenues from the lottery are not budget-solvers,” Dadayan says.

Education spending also dwarfs lottery revenue. For all 50 states, it came to over $686 billion in 2017, a nearly $94 billion increase from 2011. “In no way is the lottery going to solve your education problems,” notes Richard C. Auxier, research associate at the Urban Institute. After an initial boost in education budgets, in the long run, states with lotteries end up decreasing funding for education.

Even as the number of states with lotteries has steadily increased since 1979, the real growth rate in lottery revenues has fallen.

Dedicating revenues to a specific cause like education “sounds politically great,” Auxier adds. But it can also imperil the services lotteries are supposed to help by making them reliant on an unstable source of funding. If lottery revenue drops or fluctuates, states might be required to take money from other parts of the budget to plug the holes. “The more you make your programs rely on that money, the more dangerous, precarious the situation gets,” Auxier says.

In defense of the lottery system, Gale, of industry group NASPL, argues that money from lottery ticket sales is funneled back into local economies through prizes and retail commissions paid out to residents. Revenues fund “a variety of important causes,” he says, like elder care, tourism, economic development, and others.

But lotteries represent an easier way to raise revenue than having to raise taxes. The $72.7 billion Americans spent on state lotteries in 2016 is, in a sense, a very regressive tax, particularly when the revenue is used as a way to stave off raising actual income or sales taxes. “If you’re substituting this for an income tax or progressive taxation, your lottery is really just a tax cut for rich people,” Auxier points out.

Reams of research have found that the poorest Americans spend the biggest shares of their incomes on the lottery, including the industry’s own internal research. And research by the business school of Carnegie Mellon has also found that most of these players aren’t doing it for fun, but out of a desire to improve their finances. The higher the poverty rate, the higher the lottery sales—a relationship that doesn’t exist for other forms of entertainment, such as movie tickets.

Lotteries “have come to represent, for millions of Americans, the best way to change their lives,” Bernal says. “This has come to represent the American dream.”

A convenience store in Kingston.
Lottery tickets at a convenience and hardware store in Kingston.

Meanwhile, states spend next to nothing on actually helping addicts. Ten states don’t even have dedicated public funding for problem-gambling services, including six states that operate lotteries, according to a 2016 report from Whyte’s organization. “I think the majority of state legislators are merely ignorant” about problem gambling, Whyte says. “But I think there are more than a few that actively oppose public funds for problem-gambling programs because … they know as a state agency they’re culpable.” Those that do have funding spend, on average, just 37 cents per resident. By comparison, states spend 334 times that amount on substance-abuse disorders.

Yet compulsive gambling comes with a cost, a cost that few states factor in when they think about their lotteries. There is, of course, the cost in lost money, or even loss of life for an addict and his family. But there are also societal costs. Whyte’s organization estimates that those with the most severe gambling addictions cost a state $1,700 a year through the criminal justice and health care systems.

Adam Osmond eventually lost the two stores that fueled his addiction, in the process laying off the people who worked for him. Both the stores still sell plenty of lottery tickets. Plastered to the windows of his former gas station are signs boasting of the sale of tickets that won their purchasers anywhere from $1,000 to $100,000. A Connecticut lottery sign, showcasing a dancing figure with dollar bills raining down over its head, is still screwed to the brick wall of the old convenience store.

Osmond says he hasn’t gambled for nearly 11 years. While in Gamblers Anonymous, he met a fellow addict who had got into running, so Osmond decided to try it. He ran his first 5K race on his birthday, a hot day in June 2011. It took him almost 40 minutes, but he continued training and kept running longer races. He’s now run in over 400 races, including multiple marathons and even an ultramarathon. He’s cut his 5K time in half. During our meeting, he proudly shows me over 200 of his race medals. (But he points out that he won’t ever run a race with an entrance lottery—it’s too close to gambling.)

The legacy of his addiction haunts him. “It’s still affecting me to this day,” he says. After the lottery put a lien on his house for the unpaid tickets, he fought to save it, but in the end he simply couldn’t. He turned it back over to the bank in January 2019. “Financially, it takes a long time,” he says. “I’m still recovering.”

Losing scratch-offs tossed in the trash.
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