by William Willimon
Dr. Willimon, a Century editor at large, is minister to the university and professor of the practice of Christian ministry at Duke University, Durham, North Carolina. This article appeared in the Christian Century, January 17, 1990, pp. 48-49, copyright by the Christian Century Foundation and used by permission. Current articles and subscription information can be found at www.christiancentury.org. This material was prepared for Religion Online by Ted & Winnie Brock.
A few years ago Alverta Handel, a housekeeper from Portage, was said to be the happiest person in Pennsylvania. She beat 9.6-million-to-one odds and won an $8.2 million share of the record-breaking $115 million lotto jackpot. The biggest winner was said to be the Pennsylvania state treasury, which netted $593 million from ticket sales.
Lotteries have become a $16 billion bonanza for financially pressed states. From Maine to California, legislators have laid aside worries about the wages of sin and have embraced a tax that millions happily stand in line to pay each day. Twenty-five years ago, not one state permitted a lottery. New Hampshire broke the ice in 1964, followed by New York in 1967 and New Jersey in 1970. Now 29 states have legalized lotteries. Polls show that public approval of lotteries grew from 48 percent in 1964 to 72 percent in 1982. Per capita sales in lottery states rose from $10 in 1975 to $100 in 1988. Massachusetts residents lead the way in per capita gambling in lotteries, spending $235 in 1988, followed by Connecticut residents ($162) , New Jersey residents ($155) and Handel’s fellow Pennsylvanians ($121) Lotteries are now the leading form of commercial gambling.
It seems as if everyone wins in the lottery. Last year 48 cents of every dollar bet on the lotteries went for prizes. Another 15 cents covered sales, promotion and administration. That left 37 percent for state government. Of the $16 billion spent by the public on lotteries, about $6 billion was retained by the states as revenue, exceeding the income from state liquor stores and state-run hospitals. According to state officials where lotteries are legal, that 37 percent is a free lunch, a "painless tax" which people gladly pay.
Oregon, gorged on the proceeds from lotteries, is planning to encourage state-run betting on professional football, with the proceeds supporting intercollegiate athletics. The day may come when gambling is the major source of income for state government.
Those who question the wisdom or the morality of such revenue are chided by people like economist Dick Netzer as paternalistic. According to Netzer, "criticism of legal gambling smacks of nannying ordinary working and retired folks: We the affluent, who would not dream of playing numbers whether legal or illegal, long shots on the races or for jackpots at slot machines, don’t want you, the unwashed, to enjoy your simple pleasures." Are those who criticize lotteries only simpering nannies or affluent hypocrites who want to restrain the enjoyments of the less affluent?
Two Duke University economists, Charles Clotfelter and Philip Cook, authors of Selling Hope: State Lotteries in America, offer conclusive evidence that lotteries are not an easy way to make everyone a winner but rather a heavy tax which hits hardest those who can ill afford to pay. According to Clotfelter’s study of the Maryland lottery, people earning less than $10,000 buy more tickets than any other income group. Even in states like California, where it is claimed that rich and poor spend roughly the same amount on tickets, those at the lower end of the income scale spend a far higher percentage of their incomes on the lottery.
Proponents of lotteries invariably tie them to some worthy state need such as education. Kansas uses lottery proceeds to finance technical assistance to small businesses. More typically, the lottery money goes into the general state revenue where it is unclear whom the money benefits. Bill Honig, California public school superintendent, complains, "For every $5 the lottery gives to the schools, the state takes away $4."
Though legislatures push lotteries as a supplement for educational funds, often those lottery revenues end up being used as a substitute for other funds, with no additional money going to education. The public is duped into thinking that future tax increases are unnecessary. An additional problem in relying on lotteries for revenue is that they are a volatile form of taxation, vulnerable to changes in the economy.
When voters in Florida were approving a lottery, a survey found that the majority believed the lottery was going to pay the major portion of the state budget for education. In reality, the lottery paid only about 6 percent of education expenditures.
In 1986 lotteries accounted for an average of only 3.3 percent of the total revenue raised by lottery states -- far below the amount raised by income and sales taxes. In most of those states, say Clotfelter and Cook, "the amount raised by the lottery was less than what could have been raised by a 1-cent increase in the state’s sales tax."
The morality of such pseudo-taxation is even more suspect when one moves beyond economic analysis. Lottery advertising has been refined to a $156 million art. "All you need is a dollar and a dream," say the ads. Through high-pressure advertising and the prominent display of people like 9.6 million-to-one winner Handel, state lottery managers are altering our society’s values. A woman runs through her office shouting that she has just won the lottery and is quitting her job. An elegantly dressed couple dances aboard a yacht while a song proclaims, "I got two chances at a buck a pair, and by 7:05 I was a millionaire."
Such marketing devices are among the most questionable aspects of the lottery. Directors of state lotteries now see themselves not as public servants, but as corporate managers of a billion-dollar industry who should do everything possible to maximize lottery revenue.
Lottery agencies appoint "brand managers" to oversee product development and employ "psychometric" market segmentation classifications to plan their campaigns. Lotteries spend a higher percentage of their sales on advertising than the average corporation. Last year. California spent $35 million advertising its lottery, followed by New York with an advertising budget of $15.7 million. Clotfelter and Cook found that in seven major lottery markets, three-quarters of the advertising time purchased by state government was for selling the state’s lotteries. The government is pushing the consumption of a specific product which is monopolized by the state and whose only public virtue is that it generates some revenue for state government. Other products like beer or cigarettes also fit this description, but are not promoted by the government. In the 18 states which hold liquor monopolies, no effort is made to increase sales, even though increased liquor sales would lead to increased state revenue.
Rather than push gambling, states would do better to use their resources to warn about the potential hazards of gambling in the same way that states have assumed responsibility for warning their citizens about smoking, drinking and drug abuse.
Moreover, lottery ads are often misleading. Although a few states dare to publish the odds of winning a prize, radio and television ads almost never give the odds of winning the jackpot. The federal government requires private sweepstakes to provide more information about prizes and probabilities than do most lotteries. Of the 42 advertisements Coltfelter and Cook examined that depicted lottery players, more than 70 percent depicted a happy winner. Two states used humorous scenes to ridicule people who were pessimistic about the chances for winning. In a Michigan ad, a man stands at the lottery counter and complains that he has a better chance of being struck by lightning than winning the lottery. Zap! A lightning bolt leaves his hair singed. "One ticket, please," he responds.
Nearly all lottery ads heavily promote materialistic values, stressing the enormous size of the jackpot and the rewards of a lifestyle without work or effort. Through advertisements, backed up by the clout and the authority of state government, Americans are being told that they can escape the dreariness of work through gambling. The desire to gamble is not simply being accommodated by the government (an argument dear to lottery proponents) ; rather, the desire to gamble is being stimulated by the government.
A survey of Southern California high school students found that the percentage who participate in gambling in any form rose by 40 percent after the California lottery was introduced in 1985. They have obviously gotten the message of the lottery ads in their state. If the government says it’s OK, then it’s OK.
Clotfelter and Cook say that the lottery is "a risky experiment to determine whether a system that allocates rewards on the basis of luck will undermine a parallel system that allocates. . . on the basis of effort and skill." In short, lotteries may undercut the ethic of work and achievement, replacing it with an ethic of luck. The lottery craze is evidence of the government’s abdicating responsibility for the care and well-being of people; it is an assault upon the poor and the uninformed by governments that are being irresponsibly financed. It is, therefore, a movement that deserves to be opposed by churches and those who care about the future of our people.