Policy point-counterpoint: state lotteries.

• Author: Mercer, Gordon E.

In framing this policy debate, one must recognize that lotteries have been a part of American history since the founding of the republic. In their earliest form, lotteries were used to raise money for the Continental Army, local public works projects, and higher education. Over the last two decades, state lotteries have become an attractive revenue source to help states overcome severe budget problems. As a consequence, elected state officials have found lotteries difficult to resist. State lotteries are viewed frequently as a voluntary tax not required of all citizens, thus making them preferable to increases in state taxes. Accordingly, in North Carolina and Oklahoma, and, more recently in Tennessee, lottery legislation has been proposed to deal with revenue shortages. Are political leaders simply taking the easy way out and misleading voters by supporting lotteries that will not benefit citizens? Do lotteries take advantage of the poor? Are broad policies emerging on legal gambling without adequate consideration of long-term consequences? (1)

Policies on gambling have varied in many states; some prohibit gambling on the grounds that it is immoral while others accept gambling as inevitable and seek to regulate it. In the latter instance, state lotteries and gambling have become an accepted method for raising revenue for worthy goals such as education or promoting tourism. (2) Such aims, however, have not eliminated questions as to whether state lotteries actually enhance revenue in areas they intend to help or represent a hoax that misleads the public. For example, some critics have offered empirical evidence that overall education spending does not increase even though lotteries specifically target funds for education. Instead, these critics complain, lotteries have been used to fund state tax cuts. (3)

Debating the issue of who benefits from state lotteries is important on several fronts. Questions concerning legislative accountability need to be addressed. Do state legislators authorize lotteries to benefit socially desirable aims or do they simply wish to avoid raising taxes to secure re-election? Questions regarding the economic benefits derived from state lotteries also need to be discussed. Are the economic benefits of lottery-related jobs and programs offset by the rise in bankruptcies and increased crime rates that contribute to the loss of major businesses in states that sanction these games of chance? (4) Moral questions...