Point: state lotteries are needed.

• Author: Hart, Blake

The current economic climate in the United States has adversely affected almost every corner of the marketplace. With most sectors of the work force experiencing layoffs and hiring freezes, less money is coming into households, and, as a consequence, states and local communities are receiving less revenue from tax collection. States are continuously in search of revenue to supplement rapidly declining general funds. This search has drawn many state legislatures to support state-sanctioned lotteries as a viable measure to increase state revenues.

Economic decline has spurred state governments to find ways to meet financial needs without imposing new or higher taxes on local residents. State lotteries provide a valid means of voluntary taxation to allow for such worthy goals as the growth of education, welfare programs, and transportation upgrades. Without a state lottery, legislators are compelled to impose higher taxes upon citizens to meet these needs. Lotteries thus provide essential funds for state programs through voluntary taxation.

Lotteries have been a tool used by governments, civic groups, and private charities to fund public services for over 500 years. (1) The first commercial lotteries appeared in Belgium in the 1400s, gained popularity, and spread across Europe to Italy and England. (2) American history provides several examples of lotteries used to benefit states and their citizens. In 1826, for example, the Virginia legislature granted former President Thomas Jefferson authorization to hold a lottery to sell his properties in order to alleviate some of the large debts he had accumulated. Jefferson, however, never actually held his lottery. (3) In seeking to rebuild the South after the Civil War, Southern states used lotteries to fund state programs. (4) Currently, a number of states use the lottery to fund public services. Georgia, South Carolina, and Tennessee each use state lotteries to support education programs. The state lottery is an attractive option to legislators because citizens are not compelled to contribute and state revenue is enhanced by the proceeds of this "voluntary form of taxation." (5)

In his essay "Financing Public Goods by Means of Lotteries," the economist John Morgan argues that "relative to the standard voluntary contributions mechanism, lotteries: (a) increase the provision of the public good; (b) are welfare improving; and, (c) provide levels of public good close to first-best as the size of the...