An interesting article came out this week on gambling and the revenue projections touted by states–like Arkansas–who have legalized forms of gambling with the intention of helping the economy or generating government revenue.
According to the article,
“A Stateline analysis of 13 states that have legalized casinos, racetrack casinos, known as racinos, or lotteries in the past 10 years found that more than two-thirds of them failed to live up to the initial promises or projections made by political and industry champions of legalizing gambling.”
The article goes on to point out that figure does not take into account the high cost of crime–which studies show increases when gambling does–or, most obviously in the case of Arkansas, litigation; how much time and money are these court battles over disputed lottery tickets costing the State of Arkansas?
The article mentioned Arkansas’ lottery specifically, stating, “Another state with ambitious projections was Arkansas, where the lottery hasn’t yet provided $100 million for college scholarships in either of its first two years, as was promised by former Lt. Gov. Bill Halter. That still remains the goal, said Julie Baldridge, director of public affairs and legislative relations for the Arkansas Scholarship Lottery. But she doesn’t see it growing too much beyond that.”
What do lottery officials cite as part of the reason for Arkansas’ lackluster lottery performance? A lack of gambling options.
“We have what I would describe as a plain vanilla lottery in Arkansas,” Baldridge said, citing the lack of video lottery or keno as factors that limit revenue. “We’re going to make less money than a lottery that has all the bells and whistles.”
Forget that Arkansas has rolled out more gambling more quickly than any other state lottery we’re aware of. Forget that Arkansas only has to allocate about 21.5% of its lottery revenue for scholarships–which lottery proponents promised would allow them to allocate more for prizes, thereby enticing more people to play and drive up lottery revenue (a shady promise we believe has clearly failed). Forget that buying a lottery ticket is now almost as easy as buying a Coke. Forget that for the past two years the Arkansas Lottery’s administrative costs have been through the roof. The problem with Arkansas’ lottery isn’t poor management or bad spending habits. It’s that Arkansas doesn’t have Keno or video lotteries.
Attorney General McDaniel expressed genuine concern over Keno during the 2009 legislative session. He seemed to think it would lead to crime and increase problem gambling and gambling addiction. And lottery proponents promised from the start that video gambling would not be part of Arkansas’ lottery; that’s why there’s a provision in the law that expressly forbids gambling via a video terminal. It’s recognized as being simply too addictive.
What we have here is the same old story: Lottery’s start strong, but people soon lose interest (who wouldn’t, when your odds of winning the jackpot are so astronomical?), and the state is left scrambling, trying to figure out how they’re going to keep the lottery’s failed promises.
