Wednesday, Nov 2, 2011, 11:06 AM

Rigged: The Shame of State-Run Lotteries

Jack Meserve

Finally, a third option would be to carve out exemptions for charities or non-profits. For instance, the Heart & Stroke Foundation of Ontario runs a $2 million lottery. An idea with a similar motivation has been advocated by Stephen Dubner of Freakonomics fame: the “no-lose” lottery. Implemented in Michigan, the idea is that you deposit money in a participating bank or credit union, which then uses the combined interest to pay out lottery-like prizes, even though the player didn’t actually spend anything. Why hasn’t this been implemented more? It’s illegal in most states, because it would be competition.

Lotteries are bitter policy pills, because while it’s unlikely they’ll be repealed absent a major scandal, it’s not an exaggeration to say that no political ideology should support them. Conservatives and libertarians are against government programs, and especially against raising more revenue. It’s hard to imagine a principled conservative thinking a state monopoly whose sole purpose is to generate money is a good idea. Progressives, on the other hand, are adamant that protection of the poor and minorities is a responsibility of government, and that revenue should be raised by progressive means. But lotteries are terribly regressive, and actually rely on money from disadvantaged groups. Even though collecting revenue is important, we should remember that money is a means, common welfare the end—not the reverse.

Photo Credit: Dex1138

  • 1
  • 2
COMMENTS: 1 • TAGS: ,
return to ARGUMENTS home
 
Post a Comment

L. F. File:

An alternative you are missing is similar to the Freakonomics one but state run. This would be similar to the Premium/Lottery Bond systems run in the U.K. and other countries (see: http://www.nsandi.com/savings-premium-bonds)

Many advantages are obvious:

-- if lotteries were made illegal as previously a Lottery bond would provide legal competition that would have the advantage of marketing and advertising.

-- it encourages savings

-- much wider participation - Premium bonds are a recommended part of a rational investment portfolio by financial advisers in the U.K.

-- would also compete well with neighboring state lotteries (though the best system I think would be a national one.)

Tax exempt winnings would be necessary for the best chances of success but hopefully the obstacles to this could be overcome.

It is hard to see how a proposal for a Lottery bond issue in the U.S. could not attract bipartisan support. It would be fought hard by commercial lottery interests but perhaps public opinion could prevail.

lff

Nov 5, 2011, 8:06 AM

Post a Comment

Name

Email

Comments (you may use HTML tags for style)

Verification

Note: Several minutes will pass while the system is processing and posting your comment. Do not resubmit during this time or your comment will post multiple times.