Newspapers, radio and the tv stations raked through the 2003 State Auditor's report on the lottery concentrating on alleged improper gifts to lottery employees, bonuses, and contract negotiations. But they missed an earthquake in Colorado's lottery: The socioeconomic and demographic changes since the last state lottery audit in 1997.
Hispanic and African/Americans make up 28 percent of the players today, a nearly two hundred percent climb from 11 percent six years ago. Their population increase, according to statistics provided in the lottery reports, grew from nine percent to 19 percent. Their playing habits grew far greater than their share of the population.
I don't vouch for the veracity of these numbers. Both the 1997 and 2003 report figures came from third party contractors in April 2002 and February 1997, and there is no data provided in the audits as to how often persons played the lottery.
We are losing population in the 25 to 44 age bracket. In 1997 they were 46 percent of the population and only 34 percent in early 2002. They aren't playing the lottery as much either, down from 51 percent in 1997 to 36 percent in 2002. Perhaps they have moved on to the casinos, or maybe they don't have as many jobs.
"White/Anglo" dropped eight points in population (84 to 76) and eleven points in players (81 to 70 percent). The elderly (55 and older) went from 26 percent to 34 percent of the population. Their playing habits jumped from 22 percent in 1997 to 34 percent in 2002.
According to the 2003 audit there are as many males as females in Colorado. That's a slight switch from the 51 percent male to 49 percent female in 1997. However, female population has declined in players while male players have increased. Again, that may be the result of playing at the casinos.
The problem with comparisons: The 1997 study divided players between scratch games and lotto players, giving each group a 100 percent total. However, many people play both games and the gross revenue from the scratch games has consistently been more than double all the other games combined.
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In 2003, the advertising firm, Karsh and Hagan, became part of the investigation by the Dept. of Revenue into alleged improper gratuities. Twenty years earlier, in December of 1982, the same firm raised some eyebrows. How about these headlines in major dailies: "Newsmen accuse lottery of seeking 'kickbacks' for ads", and "Junction editor charges lottery ad 'shakebown'".
One story: "Karsh and Hagan Advertising, a Denver firm which is handling the advertising account for the new $60 million lottery, has sent a letter to newspaper executives and broadcasters around the state, informing them that lottery officials will 'review and allocate funds' according to the amount of news coverage and free advertising provided by each such organization."
In other news articles, Grand Junction Daily Sentinel managing editor David McLean called the letter "a request for a guaranteed kickback, plain and simple". Colorado Springs Gazette Telegraph editor Tom Mullen said the letter "stunned" him. "I haven't heard of anything like this in all my years in the business..."
People in the advertising business were divided. According to now deceased Sam Lusky, a Colorado advertising icon, "Agencies do not equate advertising dollars with free space or promotion. If we did we'd be trying to manage the news in a manner that's as reprehensible to the profession as it is to the editors, news directors and others who received the letter."
On the other hand, the Denver Post display advertising manager said "I saw nothing unusual in their request for merchandising help (like newsrack posters) but obviously decisions on coverage of the lottery would be left up to the news departments."
Lottery Director Owen Hickey said "it" (tit for tat) won't happen and the lottery would keep Karsh and Hagan on board. Agency head Phil Karsh told the papers he spoke with press association officials who assured him the whole thing "was a tempest in a teapot". However, press association manager William Lindsey sent a letter to newspaper editors terming the Karsh and Hagan letter "unfortunate, unnecessary and unprofessional."
(Jerry Kopel served 22 years in the Colorado House.)
Copyright 2015 Jerry Kopel & David Kopel