State lottery a gamble for San Diegans
Mike Zeidan has managed King's Liquor in Paradise Hills for 20 years, selling lottery tickets the whole time. Credit: Leo Castaneda/inewsource

State lottery a gamble for San Diegans

King’s Liquor looks unremarkable from the outside. It’s nestled next to a Ralph’s supermarket in a strip mall in Paradise Hills, a southeastern San Diego neighborhood east of I-805.

On the radio…
Sold to the public three decades ago as a revenue stream for public schools, the California State Lottery pulled in a record $5 billion in sales last fiscal year. Critics contend it’s a tax on the poor but that doesn’t seem to be the case in San Diego.

But on a balmy Thursday afternoon in mid April, the incessant beep-beep-beep of the store’s scanner hints that there’s something more at work.

It’s a frequent and regular reminder of the brisk business that the store does — much of it in sales from the California State Lottery.

King’s Liquor sold almost $1.1 million in lottery tickets between July 1, 2013 and June 30, 2014, the most recent dates for which sales figures are available. That’s more than almost every other location in the county.

Mike Zeidan has managed the store along with his brother Frank for 20 years. They’ve sold lottery tickets that whole time, at least 15,000 each week, he said.

Zeidan offers a full compliment of lottery games, from Scratchers offering payouts as low as one dollar to multi-state draw games that promise prizes of hundreds of millions of dollars.

Key points

1. San Diego County retailers sold $302 million worth of lottery tickets in the 2013-2014 fiscal year.

2. In contrast to some national trends, three-quarters of those tickets were sold in middle- and moderate-income neighborhoods.

3. The California State Lottery provided $86 million in funding to public school districts in the county.

Stores that wish to sell lottery tickets are contractually obligated to offer all the games, though the lottery allows smaller stores to start small and gradually introduce the full set of Scratchers games, about three dozen.

INTERACTIVE: Click here for a searchable map of lottery retailers and their sales in San Diego County.

Zeidan says the best seller at the moment is Hot Spot, a Keno-like game where players buy a ticket, choose the numbers they wish to play and watch a television screen where the numbers are drawn every four minutes.

“People like to come over and hang out and play that game and win instant money,” Zeidan says.

 

Top Grossing Lottery Games at San Diego County Retailers
Game Sales Tickets Sold
Instant Rollup $164,628,391 434,749
Power Ball $38,965,608 8,350,044
Mega Millions $35,414,464 11,840,068
Super Lotto Plus $26,875,044 9,559,391
Hot Spot $12,633,205 2,287,310
Fantasy 5 $11,018,391 3,659,379
Daily 3 $9,233,275 2,595,756
Daily 4 $2,062,664 664,984
Daily Derby $1,329,258 358,067

 

Zeidan breaks his customers down into two groups: those who stick to the same games and those who are on the hunt for the latest offerings.

“Most of my customers are regulars, everyday customers,” Zeidan says.

One of those regulars is Don McCrady.

McCrady, a 67-year-old retiree who lives in the neighborhood, has been playing the lottery for 22 years. “Same store every day,” McCrady says.

Don McCrady, a 67-year-old resident of Paradise Hills, is a regular customer of King's Liquor. Credit: Leo Castaneda/inewsource

Don McCrady, a 67-year-old resident of Paradise Hills, is a regular customer of King’s Liquor. Credit: Leo Castaneda/inewsource

The most McCrady says he has ever won on a single ticket is $1,400. “Not real big but enough to play back,” he offers.

McCrady describes the lottery as “just something to do…keeps me from the casinos.”

A license to dream

In San Diego County, nearly half of all lottery tickets — accounting for some $137 million in sales last fiscal year — were sold at stores in middle-class neighborhoods. The county as a whole saw about $302 million in sales over that time frame.

The data suggests that, in contrast to national trends, it is middle-income earners locally who purchase the greatest number of lottery tickets.

According to an inewsource analysis of data from the California State Lottery and the U.S. Census Bureau, in San Diego County, 45 percent of lottery sales during the 2013-2014 fiscal year were concentrated in middle-income neighborhoods; 32 percent in moderate-income neighborhoods and 22 percent in high-income neighborhoods. Just 1 percent of sales were concentrated in low-income neighborhoods.

According to the Census Bureau, about 45 percent of the county’s population lives in middle-income neighborhoods; 28 percent in high-income neighborhoods; 24 percent in moderate-income neighborhoods and 2 percent in low-income neighborhoods.

Meanwhile, a survey conducted on behalf of the California Lottery found that half of lottery players have full-time jobs, a figure higher than that of the state’s overall adult population. So, why this group?

Part of the answer may lie in the psychological drivers of playing a lottery.

Nicholas Christenfeld, a professor of psychology at UC San Diego, says the image of a down-on-his-luck lottery player “spending his last dime in a desperate effort to get out of poverty” can give the wrong impression for why people play lotteries.

A 2005 Brookings Institute report found that “…average annual lottery spending in dollar amounts is roughly equal across the lowest, middle, and highest income groups” while also pointing out that this means the poor do spend a higher proportional amount of their income on lottery products.

A machine at King's Liquor prints out SuperLotto Plus tickets. Credit: Leo Castaneda/inewsource

A machine at King’s Liquor prints out SuperLotto Plus tickets. Credit: Leo Castaneda/inewsource

“What a lottery ticket gives you isn’t a great life if you win,” Christenfeld said. “What it gives you is a license to dream. So, while you hold that ticket, essentially what you’ve won already is the opportunity to imagine your life transformed.

Christenfeld, who’s studied everything from why people look like their dogs to which part of the month carries the greatest risk of death, is quick to point out that even if one does win a large amount of money playing the lottery, that’s far from a guarantee of happiness. He notes that the news is filled with stories of folks whose lives were turned upside down because they won.

Some money to schools

It’s the government, of course, that pockets the profits from those dreams, pulling in more than $5 billion in sales last fiscal year. The 1984 ballot measure that birthed the lottery was sold to voters as a revenue stream for public schools. After paying out prize money and operating expenses like staff salaries, the lottery returned $1.35 billion in money to schools last fiscal year.

Some $86 million of that found its way into the coffers of school districts in San Diego County.

The funds are meted out based on districts’ average daily attendance so San Diego Unified received the most last fiscal year, more than $17.5 million, according to the State Lottery.

Jenny Salkeld, the district’s chief financial officer said that while that figure might seem like a lot out of context, it represents less than two percent of the district’s $1 billion-plus annual budget.

“In comparison to the overall budget, this is a small amount,” Salkeld said.

A portion of the funds — a little less than $4 million — must be used to buy instructional materials such as textbooks. Salkeld said the district has used the remaining funds on a wide variety of expenses, including salaries for teacher and student aides.

“It may be a small amount but when you’re looking at $17 million, that helps a lot of the initiatives in our district,” Salkeld said.

King's Liquor, in Paradise Hills, sold almost $1.1 million in lottery tickets in the 2013-2014 fiscal year. Credit: Leo Castaneda/inewsource

King’s Liquor, in Paradise Hills, sold almost $1.1 million in lottery tickets in the 2013-2014 fiscal year. Credit: Leo Castaneda/inewsource

The California State Lottery declined to make anyone from its marketing team available for comment but a general spokesman for the agency said the lottery sells its games as entertainment.

“Marketing is an integral part of our business,” said Russ Lopez, the deputy director for corporate communications at the lottery. “What we want to do is really appeal to the entertainment mentality of our players rather than the gambling mentality.”

Still, Mike Zeidan, the manager at King’s Liquor, thinks the gambling aspect of it all is too much to ignore.

“I think they all know about the odds,” Zeidan says, referring to his players, “but it’s a dream and everybody’s going after it.”

How we analyzed the data

Through a public records act request with the California State Lottery, inewsource received data on ticket sales by retailer. We then mapped those retailers to ZIP codes that we had previously combined with data on median household incomes from the US Census Bureau to calculate the sales by the income level of each ZIP code. ZIP codes’ income levels were based on the $62,962 median household income of San Diego County between 2009 and 2013. Low = ZIPs with median household incomes less than 50 percent of the county average; moderate = ZIPs with median household incomes of 50 percent up to 80 percent of the county median household income; middle = ZIPs with median household incomes of 80 percent up to 120 percent of the county median household income; high = ZIPs with median household incomes of 120 percent of the county median household income and higher.

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About Joe Yerardi:

Joe Yerardi
Joe Yerardi is a freelance data journalist for inewsource, where he worked between 2013 and 2016 as an investigative reporter and data specialist. To contact him with questions, tips or corrections, email joe.yerardi@gmail.com.
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