State Lotteries and Legalized Gambling: Painless Revenue or Painful Mirage

State Lotteries and Legalized Gambling: Painless Revenue or Painful Mirage

State Lotteries and Legalized Gambling: Painless Revenue or Painful Mirage

State Lotteries and Legalized Gambling: Painless Revenue or Painful Mirage

Synopsis

Lotteries and state-sponsored gambling is big business. This is the first study that evaluates the business strategies of state lotteries on two fronts. First, it examines which of the lottery strategies produces the most consistent source of revenue for the state. Second, it analyzes possible overall gambling strategies that states will need to utilize as they seek to expand gambling revenue. This is must reading for those operating lotteries, state legislators, vendors to state lottery commissions, taxpayers, and scholars in public policy and government.

Excerpt

The current state of the lottery movement in the United States has nearly a thirty-year history, starting with New Hampshire's adoption of a lottery in 1964. As of 1994, there are thirty-eight states along with the District of Columbia (D.C.) that sponsor lotteries. In 1992, these lotteries contributed approximately $11.5 billion to government treasuries. By way of comparison, the contribution that lotteries make to government coffers is slightly over twice what people spend on movie tickets in the United States.

What the above data demonstrate is that the lottery is the vehicle by which government has entered into the entertainment industry. A lottery is a somewhat unique creation insofar that it is a creature of both the public and business policy processes. Certainly, a lottery has to be approved by state legislatures, and the vast majority of lotteries are operated by state commissions that in turn are under the supervision of legislative committees. Yet a lottery has to be viewed as a business that is competing for the entertainment dollars of the public.

The strategy that lottery directors employ to operate their lottery business has to take into account two goals: (1) It must raise sufficient revenue to satisfy the needs of revenue-starved state governments, and (2) at the same time, it must maintain the public "tolerance" of this slightly unsavory method of raising revenue for . . .

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