Lotteries: A Failed Policy
Survey: 21% Say Lottery is Most Practical Path to Wealth
According to the survey of 1,000 Americans by Opinion Research Corporation for the Consumer Federation of America and the Financial Planning Association, 21% of those surveyed believed that the lottery would be their most effective and practical strategy for accumulating several hundred thousand dollars. This percentage in addition, was higher among lower-income individuals, with 38% of those who earn less than $25,000 pointing to the lottery as a solution.
Survey- 21% say lottery is most practical path to wealth
Lotteries Have Failed as a Funding Source for Education and Other Public Services
When its meager revenue stream is considered in the context of the central role the lottery plays in our debt culture and its responsibility for creating hundreds of thousands of addicted gamblers across the nation, it is irrefutable lotteries have failed as public policy. Here are just a few of many prominent examples how the lottery has failed as a revenue source despite the promises made by predatory gambling supporters:
California voters were promised that if they voted for a state lottery, the revenues would address the state’s education funding woes. Yet today, the lottery’s revenues makes up only 1.3% of the state’s education budget, according to this Los Angeles Times story.
A recent report to the Florida Legislature showed, after adjusting for inflation, the lottery’s contribution to education will soon be lower than in 2002. A continued slide, the state analysts said, would cast doubt on the purpose of the game, according to The Tampa Tribune. Florida also earmarks some lottery revenues for its Bright Futures scholarship program which go mostly to students in higher-income areas.
In 2009, a report by the Rockefeller Institute of Government concluded that predatory gambling exacerbates long term budgetary problems for states.
Even The Casinos Call the Lottery Bad Policy
This story from the Seattle Times discusses how casino companies are fighting the introduction of a state lottery in Nevada. They call the lottery a regressive tax on the poor because they spend a higher proportion of their income on lotteries.
Lottery Advocates, Opponents to Face Off Again in Nevada Legislature
The State Lottery: A Failure of Policy and Ethics
This powerful essay by Elizabeth Winslow McAuliffe in Public Integrity shows how the lottery is a public policy failure by spotlighting two fact-based conclusions: 1) the evidence indicates that the original aims of the state lottery have not been fulfilled; and 2) the lottery cannot be defended as an ethical enterprise for government.
The Reverse Robin Hood Effect
Using data acquired from the Florida Lottery Commission, Florida scholars assessed what groups were benefiting from the lottery-funded Florida Bright Futures Scholarships and who were being harmed. Not surprisingly, the study reported that the “net benefits of the scholarships accrue disproportionately to counties with heavier concentrations of white, wealthy, and well-educated households.” The study concluded by stating: “If the Florida Bright Futures Scholarships are going to be made more equitable, the citizens who are harmed — the poor, the less-educated, and minorities, as well as citizens who care about fairness — need to get involved.”
The second study below uses survey data and finds similar results.
North Carolina Community College Students Become “Collateral Damage”
The North Carolina House recently voted on a budget that will cut financial aid from lottery funds to low-income community college students. Since creating the state Lottery in 2005, lawmakers have “tinkered with the formula” that initially allocated 10 percent of half its net proceeds to need-based college scholarships.
Aid to North Carolina Students Cut to Repay Debts
Government’s Monopoly of a Failed Policy
Yale Law School’s Stephen Carter wrote terrific column in April 2011 on state lotteries. Carter writes: “Why on earth do we allow the government to hold a monopoly on the very profitable (if rather disgusting) business of persuading the suffering to part with their money in the hope of a munificent return they are all but certain never to see? In other words, why is the government in the lottery business at all?”
The state lottery is a failed policy and more and more smart people like Carter are speaking the truth about it.
End the Government’s Lottery Monopoly
Lotteries Place Disproportionate Tax Burden on the Poor
In this Reuters opinion piece, David Cay Johnston examines the shift in how in 11 states, lotteries, the most heavily taxed consumer product in America, generate more revenue than state corporate income taxes. Johnston also raises the interesting point that the increasing trend toward easy reliance on lotteries has not translated to increased revenue for states.
U.S. Lotteries and the State Taxman
Mass. Lottery Officials Knew and Encouraged Manipulation of Game
The Boston Globe exposed that just three groups of bettors accounted for most of the winning tickets statewide for the lottery game Cash WinFall. Massachusetts Lottery officials initially said they were surprised to learn that just a handful of gamblers had taken over the $2 games and announced new rules to limit the dominance of sophisticated bettors.
Upon further investigation, the Globe “has found that lottery managers for years allowed and some say even encouraged the groups to manipulate the game, Cash WinFall. They provided extra ticket machines and printers to accommodate the biggest player, a retired store owner from Michigan, so he could buy more tickets faster. Gerry Selbee, whose gambling group spent millions of dollars on the game, said the regional director in Western Massachusetts personally thanked him for propping up flat lottery sales.”
Mass. Lottery Officials Helped High Rollers See Windfalls
2012 Bloomberg News “The Sucker Index”
Bloomberg News ranked U.S. states by what it called “The Sucker Index” using 2010 data from the US Census and annual reports from state lottery commissions. The total dollar amount of prizes awarded was subtracted from ticket sales, and then the difference was divided by the total personal income of each state’s residents.