Lotteries Are Never Essential
A pandemic is a good time to abolish predatory government practices.
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Some states are starting to “re-open” their economies from coronavirus-related shutdowns, but most of the country is still operating under a system in which only “essential” businesses are allowed to operate.
Fun fact: Lotteries are considered essential, with lottery workers needing to report to work in many states. Not a single state has suspended its lottery games during the pandemic, even though in-person sales are, in most places, the only way to play. (Just seven states allow online lottery sales.) The only step some states have taken is to suspend lottery advertising until the coronavirus crisis is over.
This has led to some concern trolling about people spending their coronavirus stimulus monies on lottery tickets. But the real problem here is that states run lotteries at all.
In fact, the pandemic, which is causing a drop in lottery demand all over the country even as the games are still running, is the perfect time to abolish state lotteries altogether.
As I explained in my book, lotteries in America date back to the colonial era. George Washington tried to use one to raise funds for a road across the Blue Ridge Mountains. They were eventually abolished, though, due to widespread corruption and fraud. Congress even made it illegal to use the mail to run a lottery, which was at the time the dominant way in which the games were organized. The last lottery in that era, in Louisiana, shuttered in the 1890s.
But a good scam doesn’t stay gone forever. The modern lottery began in New Hampshire in the 1960s, with the funds raised dedicated to public schools. Since then, nearly every other state in the union has gotten in on the action.
There are two big problems with the current version of state-run lotteries. First, players are disproportionately made up of the poorest and most economically desperate residents. And they aren’t playing for the joy of the game; they’re playing because they have so little money that a winning lottery ticket could be life-changing.
It’s no coincidence that 22 states set lottery sales records during the depths of the Great Recession. And states encourage this behavior with the “hey, you never know” message of instantaneous riches. Lotteries are literally governments preying on economic desperation to raise cash.
Second, though states market their games as raising critical money for important government programs — with education the most prevalent beneficiary — more often those budget promises turn into a shell game. Lawmakers feel free to raid the programs that benefit from lottery funds and use the money elsewhere, since the lottery is there as a supposed backstop. Money is fungible, after all. Historically, states that don’t use lotteries for their education budgets are more likely to raise education spending than those that do.
So states entice their most desperate residents into spending money on a long-shot bid at getting rich, and then don’t even use the revenue for the intended purpose.
There’s also a limited supply of gambling dollars available, and with more states piling into the fray and introducing more games, governments eventually max out what they can raise via lotteries — and that was happening before the pandemic decimated demand and caused an unexpected revenue plunge.
In a perfect world, states would decide now that lotteries aren’t worth the human cost or the budget uncertainty, since lawmakers will have to scramble to plug lottery-related holes with other funds. However, my concern is that, instead, the pandemic will accelerate the trend toward online lottery games, which pre-dated coronavirus, since the states with online games aren’t seeing as precipitous a drop in participation.
Putting lottery games a phone swipe away would exacerbate all of the problems I’ve highlighted.
President Benjamin Harrison in 1890 decried the “widespread corruption of public and private morals which are the necessary incidents of these lottery schemes.” It was true then and is true now: Instead of using the pandemic to find new and inventive ways to scam their own residents, states should end the shell game altogether and raise funds from those who can actually afford to pay.
One more thing: Friday is May Day, and workers at several large corporations, including Amazon, Whole Foods, Target, and Walmart, are planning to strike in order to protest workplace conditions that leave them vulnerable to coronavirus. Seems like a good time, then, to link to this excellent storymap from Good Jobs First, which tracks how Amazon used taxpayer subsidies to build the warehouse network that is now at the epicenter of its coronavirus problem.
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— Pat Garofalo