Nice timing. Stephens Media does a piece today suggesting that lottery fever has cooled. This suggests Arkansas may not reap the bonanza that Lt. Gov. Bill Halter expects should his idea be approved by voters as a revenue producer for college scholarships. He claims revenues are steadily increasing in the 42 states with lotteries and that "every dollar generated" is a dollar for scholarships. That last statement is, of course, wildly misleading. Only the profits, not the payouts and administrative costs, will go to scholarships. And hang on for more about profits.
In the lottery convergence today, there's also John Brummett, with a column getting at the still-intriguing question of just what is the deal with Bill Halter.
Finally, and climactically, see the New York Times today for a major report on this subject. Bill won't like it much. Headlined: "For Schools, Lottery Payoffs Fall Short of Promises," it reads, in part:
Now, a New York Times examination of lottery documents, as well as interviews with lottery administrators and analysts, finds that lotteries accounted for less than 1 percent to 5 percent of the total revenue for K-12 education last year in the states that use this money for schools.
In reality, most of the money raised by lotteries is used simply to sustain the games themselves, including marketing, prizes and vendor commissions. And as lotteries compete for a small number of core players and try to persuade occasional customers to play more, nearly every state has increased, or is considering increasing, the size of its prizes — further shrinking the percentage of each dollar going to education and other programs.
In some states, lottery dollars have merely replaced money for education. Also, states eager for more players are introducing games that emphasize instant gratification and more potentially addictive forms of gambling.
Of course, the question of how much lotteries contribute to education has been around for years. But the debate is particularly timely now that at least 10 states and the District of Columbia are considering privatizing their lotteries, despite assurances decades ago that state involvement would blunt social problems that might emerge from an unregulated expansion of lotteries.