Hopes, dreams and Lotto

Like any other business, the Lotteries Commission has expenses to meet and staff to pay, so it was not surprising its chairman Judy Kirk and chief executive Todd McLeay should be delighted with the results for the 2010-11 financial year - record sales of just under $926 million.

That was a spend of about $290 on Lotto tickets, Instant Kiwi scratchies, Keno cards and other commission products by every New Zealander over the age of 18.

Revenue was up $143.6 million on the previous year, a result the pair called "particularly gratifying" in today's challenging retail environment. What's more, Mrs Kirk and Mr McLeay said they had one specific strategic objective for the future - to encourage more people to play.

Should that objective ring alarm bells? There is one crucial difference between the Lotteries Commission and other businesses. If the commission was selling shoes, clothes or toasters, one might applaud such stellar financial results and Mrs Kirk's and Mr McLeay's determination to attract more custom.

But the Lotteries Commission is not selling shoes, clothes or toasters - its stock in trade is hopes and dreams and the lure of mega millions for the lucky few.

Given that fact, should the commission be looking to draw even more money from the pockets of New Zealanders?

Kiwis know in their heart of hearts the chances of a major win are infinitesimally small but they take the punt anyway, justifying their spending as an investment or a speculation. They imagine it might be them who wins the next huge prize of $8 million, $25 million, $28 million or $35 million, all staggeringly large amounts which have been won by individuals or syndicates in the 2010-11 year.

In these recessionary times, and with job insecurity an ever-present threat for some, research shows those struggling financially are more likely to buy a Lotto ticket as a potential get-rich-quick fix to their problems.

What's $5 or $10 on a Lotto ticket when you have lost your job, face mounting debts or about to lose your house? And the temptation to buy a Lotto ticket is everywhere. The brightly coloured Lotto counters are usually the first thing to hit shoppers' eye when entering most supermarkets and many suburban dairies.

Tempting, too, are the signs on the window trumpeting the successful sale of a major prize, and media coverage of how Mr and Mrs Average's life has been transformed by their winnings.

But it would be unfair to single out the Lotteries Commission unduly for its aggressive marketing. New Zealanders have a love affair with gambling which extends beyond Lotto and have spent about $2 billion annually on all forms of gambling over recent years.

A comprehensive survey carried out last year by the Health Sponsorship Council revealed just over four in five people had gambled at least once in the previous 12 months. Of those people, 60% had purchased a lottery ticket, 43% had bought a raffle ticket or attended a fundraising casino evening, 33% had bought an Instant Kiwi ticket and 29% had made money bets with family or friends.

Pokie machines in pubs and clubs, the subject of much negative publicity as a particularly addictive form of gambling, were played by 16% of gamblers. A relatively low number of those responding to the survey - 12% - had bet on horse or greyhound races, 10% had gambled at a casino, and 4% had bet on a sports event.

Established 25 years ago, the commission is a Crown-owned entity and, as such, returns its profits to its shareholders, the New Zealand public. In the 2010-11 year, it allocated just over half its turnover, $498.4 million, to prizes whiled a further $244 million was spent on taxes and retailers' commission. Its $183.3 million profit for the year was distributed in grants to a diverse range of activities, including community facilities, heritage and cultural groups, health research projects and search and rescue equipment.

That is the welcome flip side to the rather more ambivalent question of whether the State should be parting citizens from their money through the promotion of gambling - particularly when large numbers of those who participate can ill afford it.