Until a few hours ago I didn’t know that you could buy lottery tickets online. That’s probably because I have never played the lottery. Not once. Not ever. Risky behavior only seems worth it if there is some reasonable chance of a return. With state-sponsored gaming the only sure return goes into government accounts. This is especially true if you recently won big in Illinois.
The Land of Lincoln has shamed itself again, this time over the inability to pay its biggest lottery winners absent a state budget (see story as reported by the Illinois Policy Institute).1 The little winners didn’t get stiffed. Only the big ones. The Illinois Lottery website lures gamers with “Cash for Life,” but players should have remembered the lottery’s slogan: “Anything’s Possible.”2
To be fair, at some point in its dimly-conceived budgetary future Illinois will no doubt pay lotto winners what it owes. That doesn’t answer the more fundamental question of the ethics of government-sponsored gaming and who we are targeting as a revenue source.
Department of Justice plays games with gambling ethics
We have an Office of Government Ethics in Washington to stem conflicts of interest. What we don’t have is someone overseeing the ethics of state-sponsored gaming’s revolving door that takes money in and spends it on the same people buying lottery tickets.
State lotteries are only part of the online gambling game. When the Justice Department decided to allow internet gaming under the Wire Act, Republicans pushed for legislation to restore the prohibition:
“This is yet another example of the Holder Justice Department and Obama Administration ignoring the law,” said Graham, a member of the Senate Judiciary Committee. “In 1999, South Carolina outlawed video poker and removed over 33,000 video poker machines from within its borders. Now, because of the Obama Administration’s decision, virtually any cell phone or computer can again become a video poker machine. It’s simply not right.”3
Since the DOJ made gambling more accessible, three states took up online gaming and ten more may join in the fun.4 Like relaxing marijuana laws, a good revenue generator catches on fast.
Government-sponsored gaming: revenue at the expense of the vulnerable?
An article published in the Social Security Bulletin mentions a survey where 21% of those questioned claimed that lottery winnings were a good way to amass a retirement fund.5 With this quality of financial literacy behind decisions, how can we justify government-sponsored gaming as an ethical means of funding state budgets?
It’s a pretty safe bet that lottery tickets are a less prudent way to fund your golden years than investing. For those without money to save, efforts to stamp out the use of public assistance, particularly cash-in-hand Electronic Benefit Transfer (“EBT”) cards, for everything from booze to lottery tickets prove that gambling is considered by some to be a viable alternative even to eating. Welfare abuse puts taxpayers in the position of funding a revolving door. Assistance diverted from basic necessities is eventually paid out again to rescue the vulnerable.
Not only do we have to worry about welfare being spent on alcohol and lotto jackpots, legal dope is also on the menu, another state-regulated treat that Representative Paul Gosar took up with his No Welfare for Weed Act:
A Fox31 Denver investigation from February of this year revealed tens of thousands of dollars have been pulled out of ATM’s using welfare EBT cards and been used to purchase marijuana.6
Fortunately, some lawmakers can find a silver lining in almost anything. Tennessee Congressman Steve Cohen helped push lottery tickets as a way to fund scholarships totaling over $3 billion.7 Who is paying for those lottery-funded educations? A study published this year gives us a hint:
We found strong evidence that gamblers that were African-American, were Hispanic, or did not finish high school spent more on lottery tickets than gamblers that were not in these groups, and that these three categories of gamblers were overrepresented among the top 20% of lottery players by spending. This agrees with what has been found in previous studies.8
Legislators vex over ensuring equality for minorities. They have also taken up the issue of internet gaming ethics. One of the items considered in a House subcommittee hearing was ensuring “transparency about odds and risks so consumers can make informed choices.”9 Is an informed choice possible for anything but the state when the issue is luring people to spend money on the lottery or making gambling more accessible? Ask members of the Illinois legislature. Those who gambled on the state’s lottery and won have been gamed by the same get rich quick opportunity offering “Cash for Life” to anyone with the price of a ticket.