March 22, 2012 | Posted in Arkansas Lottery | By

If there’s one thing gambling proponents are good at, it’s spinning the facts. “Somebody’s Gonna Win,” is a common slogan stamped on casinos all over America, but there’s another side to that coin: “Almost everyone is going to lose.” How many casinos do you see with that on the marquee? And yet it’s 100% true.

The same goes for state lotteries. On Tuesday, an article appeared in the Paragould Daily Press highlighting a lot of the “pros” of Arkansas’ own lottery (you can see a PDF of the article here). Well, I think there may be a little fact-spinning being done by the folks at the Lottery Commission, and I want to take a moment to be sure everyone gets both sides of the argument.

1. Ruining Lives

First, one lottery official was quoted in the article as saying, “It’s a lottery. It’s gambling…If you play because you think you’re going to win, we don’t want your money. But this is America. People can ruin their lives if they want to.”

I haven’t seen any ads from the Arkansas Lottery saying, “Only play if you can afford it.” They all seem to assume Arkansans can. And it may be true that Americans are free to ruin their lives, but the State should not be to blame. Think about how much money our state spends trying to prevent people from ruining their lives. We have substance abuse programs. We have counseling programs. We have entire state agencies dedicated to public health and human services. And yet the Arkansas Lottery—a state commission—is admittedly complicit in ruining people’s lives. Does that make sense at all?

2. Adversely Affects the Poor

Second, lottery officials say their games do not adversely affect the poor, pointing out that “state polling [shows] the average household annual income for ticket buyers at $37,500.” I have no doubt that those numbers are technically accurate. However, their polling methods are inadequate.

What do I mean? Well, suppose I asked 100 adults, “Do you purchase gasoline?” The vast majority of them would probably answer “yes.” However, if I asked them, “Do you purchase gasoline every day?” the vast majority would probably say “no.” The question you ask impacts the kind of information your polling obtains.

So what am I driving at? If you poll every Arkansan, asking them whether or not they have played the lottery, most may say they have. But asking that question doesn’t tell you how often they purchase lottery tickets or how much money they spend when they do. Most state lotteries don’t like to ask those kinds of questions, because the answers almost always show that the heaviest lottery players are the poorest citizens. More detailed polling on lotteries elsewhere shows that wealthier individuals play the lottery only occasionally; low-income families play the most.

If a Walton or a Rockefeller purchased a single lottery ticket, they could really skew that broad statistic our lottery officials are tossing around so casually. We’ve seen figures before showing some of Arkansas’ poorest counties top the list in gross lottery ticket sales. If you want an accurate assessment of who is playing your lottery and how much they are spending when they do, you have to dig a little deeper. Our lottery commission simply isn’t doing that.

3. Less Than Successful Scholarships

Third, the article quotes lawmakers on scholarship awards, saying the scholarships are successful. The truth is, in two and a half years, our lottery has not met its scholarship projections. The reason is the way the lottery is managed. Only about 21%-22% of gross ticket sales actually gets put in the scholarship fund. The rest is spent on administration, prizes, and other expenses. Lottery officials have tried to argue that focusing on prizes drives up sales, which increases scholarship funds in the long run, but we know that doesn’t work. If it did, Louisiana’s lottery would not have generated more money for its education programs than Arkansas’ did, despite the fact that its revenue from ticket sales was much lower. What’s more, Arkansas has been forced to decrease scholarship amounts already, due to insufficient funds. The Arkansas Lottery has succeeded in providing some scholarships, but not at the wildly successful level promised.

4. Anything But Plain Old “Vanilla”

Fourth, lottery officials have, once again, called Arkansas’ lottery plain, old “vanilla”—no bells or whistles. We’ve talked about this before. Arkansas has rolled out more lotteries more quickly than any state I’m aware of. We have all kinds of scratch-off tickets. We have two multi-state lotteries. We’ve had raffles and draw games. All in all, there are over seventy different lottery games in Arkansas. Only a handful of states arguably have more gambling. There’s nothing “plain vanilla” about that.

5. Hurts Local Economy

Finally, there’s the issue of money being pulled directly from the local economy by the lottery. Lottery retailers keep a very small percentage of lottery ticket sales. The bulk of the money gets sent to lottery officials in Little Rock, to cover the Arkansas Lottery’s expenses. Buying a lottery ticket does not help the local economy the same way buying a gallon of milk or a sack of potatoes does.

To illustrate this, look at some of the figures offered in the article. Greene County residents have claimed $9.5 million in lottery prizes. Sounds pretty good, right? But, mathematically, the lottery takes in about twice as much as it pays out in prizes; your odds of breaking even on a lottery ticket are usually about 1/3, so to win $1 you usually have to spend $3.

So if Greene County residents have won $9.5 million from the lottery, it’s safe to assume they’ve probably spent something in the neighborhood of $20-$30 million on lottery tickets. That’s money that has left the county, and isn’t coming back. Even the scholarship money Greene County students receive can’t make up for the loss.

Conclusion

Lottery officials can spin the facts and the numbers all they want, but at the end of the day there’s simply no way around it: Arkansas’ lottery has done far more harm than good, and I don’t see that changing any time soon.

Jerry is the founder and president of Family Council. He began Family Council in 1989 after a successful effort to amend the Arkansas Constitution to prevent the use of public funds for abortions. He and his wife reside in Little Rock. They have four sons.