Lotto Loco (Editorial)

Some would argue that Arkansas is behind the times by not having a state lottery. We’ve long thought that Arkansans were wise in forgoing one. Could it be that we’re so far behind that we’re first?
Forty-three states have lotteries. They can’t all be wrong, can they? Sure they can. And the latest trend toward selling off lotteries is evidence that they aren’t the cure-all for state governments that they were being billed as just a few years ago. Or even by Lt. Gov. Bill Halter a few months back.
What brings this up is a commentary that ran recently in the Christian Science Monitor on selling off state lotteries.
At least a few states are looking to do just that. “This get-rich-quick scheme is furthest along in Illinois,” the commentary said. “The governor hired investment banks in January to help solicit private bids to buy the state lottery (without the legislature’s permission). In February, the Texas governor proposed selling the lottery for an estimated $14 billion.
Last month, California’s governor proposed a long-term lease of the state lottery for a one-time payment of up to $37 billion. Indiana’s governor was able to have the state senate pass a measure this spring to privatize the Hoosier Lottery, but it was shelved in the house. The idea is percolating in many other states. …
“States now speak of ‘revenue gaps’ from lotteries, which drives them into more aggressive marketing, addicting even more poor people. And rather than take responsibility for cutting spending or raising taxes, many officials now want to balance the books with a windfall sale or lease of the lottery and allow private firms to run them as regulated monopolies. Such firms could easily become unscrupulous in how they advertise to the most vulnerable: the young and the poor. …
“Gambling is a perverse, downward cycle for both states and many people. Selling the lottery shows just how perverse.”
We agree. There’s very little good that can be said about lotteries and much bad.
– Backers would have people believe that if there were a lottery, no new taxes would have to be passed. Evidence from nearly all states indicates just the opposite: taxes rose faster in lottery states than in non-lottery states. Lotteries do, however, allow people to feel justified in voting down millages for local school districts since most earmark at least some lottery profits for education.
– Evidence also shows that after a few years the novelty starts to wear off and ticket sales decline.
– Lottery tickets compete with other goods and services that generate private income and taxable sales. Since lottery tickets are not taxed, lottery sales cut into the two largest state tax bases — sales and income.
– Economists regard lotteries as a regressive tax. That’s because the poor spend a larger proportion of their incomes on lottery tickets.
Arkansas, fortunate not to have become addicted to lottery revenue, now doesn’t have to worry about how to wean itself off.