In 2010, an Alabama state lottery was a huge issue in both the Democratic and Republican primaries. Candidates made a lot of promises for how lottery money would be spent and speculated about how much money an Alabama lottery would really raise.
In 2016, the issue is again on the table as Alabama struggles with budget shortfalls and education funding.
Left in Alabama did an in-depth, 5-part series on state lotteries in general. We talked about the states that used lottery money wisely, states that over-promised, abusive advertising practices, and policy recommendations.
Here’s the entire series!
Part 1: An Overview of State Lotteries and How They’ve Changed Over Time
Maintaining revenue is vital because state governments quickly become dependent on lottery money. It’s seen as a painless way to raise money without increasing taxes. “Nobody forces anyone to play the lottery,” the thinking goes, “so this is like a voluntary tax.” But when the :volunteers” begin to lose interest, state coffers suffer and so do the state services that depend on the money.
Georgia, Florida, and Tennessee education lotteries all face funding crises today due to flat or declining lottery revenues and skyrocketing college tuition costs. When the programs were created, legislators were farsighted enough to set up reserve funds for just this sort of situation. However, expecting elected officials to ignore hundreds of millions of dollars just sitting around is like expecting my cat to just “ignore” the mouse that’s right in front of his nose.
When times were good, state legislatures expanded the programs – particularly the scholarship programs. Georgia, in particular, went from merit scholarships for students below a certain income to merit scholarships for everyone. And it’s now dealing with a severe funding crisis in the HOPE scholarship program.
Part 3: Playing the Lottery: Looking for Easy Street in all the Wrong Places
Other states conduct extensive marketing surveys that pinpoint players’ demographic characteristics and use those statistics to create marketing plans. For instance, the advertising plan for Ohio’s SuperLotto game was to advertise most heavily early in the month – when government benefit checks are distributed. That strategy was based on demographic studies that showed likely players had the most disposable income during that time.
The federal government banned lottery advertising until 1975, when states were free to market the games. In 1997, states spent over $400 million on advertising and promotion.
Part 4: Welfare for the Rich? The Debate Over Lottery Scholarships
When most of us hear the phrase “education lottery” we think of Georgia’s HOPE scholarship program. It’s been wildly successful and has made it possible for thousands kids to attend college – many of whom wouldn’t have had the chance otherwise. Or has it? Academic studies and statistics show that merit-based scholarships fund the educations of students who would have attended college anyway – mostly white, middle and upper-middle class students.
This week we’ve examined other states’ lotteries, how they’re run, how they’re marketed, who plays, and who benefits. As part of this process – I think – we’ve found both strengths and weaknesses in the programs and we can hopefully learn from this.
If Alabama is to have an education lottery, we owe it to ourselves and our children to make it the nation’s best. As such, I offer these 8 suggestions for lottery operations and scope.