Ban Misleading Advertising in Lotteries and Ensuring Equitable Distribution of Lottery Proceeds Through Disclosure and Transparency

WHEREAS, In 1964, the State of New Hampshire introduced lotteries as a way to increase revenue without raising taxes. Today, all but five U.S. states operate lotteries, with some states' lottery revenue even exceeding that of corporate taxes. In fact, in 2021, Americans spent about $105 billion on lottery tickets, making the lottery the most popular form of gambling in the United States; and

WHEREAS, State lotteries are one of the most neglected examples of systematic racism in the United States. Those who play the lottery most frequently are disproportionately Black people, people of lower incomes, or high school dropouts, with the top ten percent of players accounting for two-thirds of total lottery sales. On average, Black people spend five times as much money on lotteries as White people do; and

WHEREAS, National studies have shown that lottery outlets are often heavily concentrated in neighborhoods with large populations of racial minorities who yearn for an alternate mechanism for social mobility and face a heightened risk of developing gambling addictions; and

WHEREAS, States use predatory and deceptive marketing tactics to influence poor and otherwise vulnerable people, the majority of whom are Black and Hispanic. One such tactic is using language and cultural imagery to appeal to a particular group. For example, the Washington, D.C. Lottery was recently condemned for running an ad that used an image of Reverend Doctor Martin Luther King Jr. and encouraged players to "honor his dream" by purchasing lottery tickets; and

WHEREAS, Ethnically ambiguous advertisements can be harmful to economically vulnerable people. Ads like "Fastest Way to a Million Dollars" encourage people to "play often, spend more, and overlook the long odds of winning." While it is true, for example, that consumers lose about 35 cents on every dollar spent playing lotteries, state lotteries are not required to disclose this because the lotteries are exempt, as state agencies, from regulations of the Federal Trade Commission that prohibit deceptive and misleading advertising; and

WHEREAS, States use the proceeds from lottery ticket sales to further disadvantage minority communities. The way state governments spend their share of lottery proceeds varies by state. But, it is typical for states to donate a certain percentage of ticket-sales revenue to specific state causes and, with the most common one being education.

THEREFORE, BE IT RESOLVED, that the NAACP will support and encourage legislation that bans misleading and predatory advertising for state lottery sales; and

BE IT FURTHER RESOLVED, that the NAACP supports the equitable distribution of lottery proceeds, and NAACP units are encouraged to support legislation that requires states to disclose in detail how lottery proceeds are distributed and to ensure that the distribution are equitable.

BE IT FINALLY RESOLVED, that the NAACP will advocate for states to post the information on how proceeds are used by the state lottery on gambling hotlines nationwide state websites so that the information is easy to locate.