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The state of the Lottery

The Statesman has an interesting two-part story about the state of the Texas Lottery today. Part One is about the declining fortunes of Lotto Texas and what that means for the state’s finances:

Consider:

• In 1994, 70 percent of adult Texans reported buying tickets. Today, it’s closer to 40 percent, meaning the lottery must extract more dollars from fewer people to keep raising the same amount of money. In 2004, the state’s estimated 9 million lottery players each spent an average of $390. Last year, an estimated 7.4 million players averaged $500 each.

• The state has become increasingly dependent on instant scratch-off games, which today generate 75 cents of every lottery dollar. Yet such games are more likely to be played by “less educated and lower income” residents, according to the Texas Lottery Commission’s research. The latest analysis found that “unemployed (players) were more likely to purchase scratch off tickets than employed and retired” players.

• Because the state’s take is smaller on instant tickets, it must sell more to make the same profit. Last year, the lottery sold nearly $700 million more in tickets than in 1998 — and gave schools $160 million less.

• As a percentage of education spending, the lottery’s contribution is shrinking. In 1996, lottery proceeds paid for about two weeks of schooling for Texas students. This year, the money raised by the lottery will barely cover three days.

Part 2 is about the scratch-off games. I really try to be open-minded about expanded gambling in Texas. The argument that people are gambling anyway so we may as well let them do it here and keep that money in the state is a persuasive one. It’s just that it’s nearly impossible to find a story that analyzes some aspect of the gambling we already have – horse racing, bingo, the lottery – and comes to the conclusion that it has met the promises that were made of it when it was first legalized. Why should we expect this time to be different?

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