More than ever before there are compelling reasons for Utah to steer clear of a state lottery.
The Legislature has repeatedly spurned lottery proposals in the past, but lawmakers had better prepare to resist another effort when their 1989 session convenes next Jan. 9.Why? Because a few legislators sincerely think a lottery is a "painless" way to raise state revenue. Because they seem bound to be encouraged by the fact that Idaho, Indiana, Kentucky, and Minnesota approved new lotteries in the Nov. 8 elections. And because many Utahns might favor such a move for this state.
Despite the recent addition of four states to the list of those with state-sponsored gambling, there are signs that many Americans are beginning to have second thoughts about the wisdom of this method of raising revenue.
In Idaho, for example, the lottery was approved by a margin of only 4 percent this time around, in contrast to 1986 when Idahoans approved the proposal by a margin of 20 percent in a move later ruled unconstitutional by the Idaho Supreme Court.
Utah isn't the only state that continues to shun a lottery. North Dakota voters have rejected it twice, including last June, when it was defeated by a larger margin than in 1986.
Moreover, plenty of Americans in states with lotteries wish they never heard of this form of legalized gambling. As a leading case in point, take what's happening in California.
A survey shows that most school superintendents in California consider the lottery an unreliable source of revenue and feel it has a negative impact on the character of students. The critics include California's State Superintendent of Public Instruction, Bill Honig, who says the state's schools are worse off financially than they were before the lottery.
Maybe that's because, once a lottery is sold as a way of helping schools, legislators in California and elsewhere have found it easy to divert funds from education to other purposes.
Or maybe it's because lotteries don't raise as much money as people think - 2 percent of the state budget, on the average. No state raises enough money from its lottery to avoid the need for occasional tax hikes. Ohio and Michigan are just two of the states that have enacted major tax increases despite their lotteries.
Keep a few other points in mind, too:
- A lottery is an extremely expensive tax to administer. Most taxes cost only one or two cents per dollar to collect. Lottery operating expenses, including prizes, divert 60 to 75 cents, some of it to out-of-state suppliers of tickets, equipment, and management services.
- A lottery is a particularly regressive way to raise revenue, since it has strong appeal to the poor who can least afford to gamble away their money.
Since the California lottery began, the California Grocers Association has noted that sales of lottery tickets were accompanied by equivalent declines in food sales. That's no coincidence. Winn-Dixie, one of the nation's largest grocery chains, has discontinued selling Florida lottery tickets because they were losing money on them despite their nine percent commission.
- When a state adopts a lottery, it induces many non-gamblers to start gambling. Just ask Durand F. Jacobs, chief of psychological services at Loma Linda, California Veterans Hospital, who notes: "When a state legalizes any form of gambling, such as a lottery, you get an increase in all forms of gambling, both legal and illegal." Is that really what Utah wants?
- State lotteries require aggressive marketing to be successful. They put the state government in the position of running advertisements to promote a scheme which discourages thrift while increasing welfare burdens and law enforcement costs. As an article in the American Journal of Economics and Sociology observes: -". . . adoption of a state lottery is associated with a three percent increase in the state crime rate. This is a significant effect, one that should not be ignored in considering whether a state should operate a lottery."
But perhaps most importantly, a state lottery involves much more than financial considerations. Like any other form of gambling, a lottery simply cannot be justified on moral grounds. Instead of repeating the mistakes of other states, Utah should learn from them and continue to spurn proposals for a state lottery.