Editorials

The ultimate victims of the great "get rich quick" lottery craze that state legislators throughout the nation bought into over the years has turned out to be the states themselves.

What other explanation could there be to the recent rush of state governors trying to unload their lottery operation problems in the name of privatization?

It looks like the biggest flaw with that idea is that even though state government would have the operational mess out of its hands, the state still would have all the other lottery problems and now it likely would be operated by professional gambling standards, making it even more of a losing proposition to the people.

Lotteries and legalized gambling in all forms once were avoided like the plague by most states. But a few states with budgets strained to the utmost opted to adopt state lotteries which they visualized as a huge windfall of easy money to avoid raising taxes.

Even though most of those operations showed a pattern of starting with some impressive returns in revenue for the states the enthusiasm soon waned among players and returns dwindled. That is not to mention other problems created by the lottery such as evidence many of the most regular "players" are people in income categories that can ill afford the expense.

Yet other states looking for an "easy" way to boost revenues turned to the lottery until most now have them.

Texas has had a lottery several years now and like the experience in most other states the income from that enterprise has mostly been disappointing. Texas Gov. Rick Perry proposed to have the state lease the lottery to private interests but the legislature rejected the idea.

Lottery privatization has not yet started in a big way, but a number of state governments now are looking at it as a way to add more money to state government coffers.

"In nearly all the states where lottery privatization has been proposed, the executive was the proponent," said Arturo Perez, a financial analyst for the National Conference of State Legislatures who has been tracking the issue. "It's possible we will continue to see this as an option that states will consider for raising new revenue."

State lotteries have been turning to different schemes in their efforts to boost revenues including ever-higher priced instant tickets and innovative marketing tricks in what has been described as "an era of stagnating revenues."

"State-sanctioned lotteries are being forced to grapple with decreasing interest in their product -- gambling -- and a corresponding decrease in revenue derived from lottery games," said Michael LaFaive, director of fiscal policy for the Mackinac Center for Public Policy. "This makes a good time to consider privatizing."

What all of this privatization talk seems to indicate is that the states actually have a losing proposition on their hands in the lottery, or at least one that is not providing enough return to justify its existence.

In Texas, the people voted for a state operated lottery, not for one to be operated by professional gambling interests. Returns from the state lottery proved disappointing from the start and it seems highly doubtful an honest appraisal of the operation would find it has been highly successful as a state revenue source. It is even more difficult to justify its existence by any other measurements.

Other states obviously have had similar disappointing experiences and are looking for a way to make a positive change. But the reluctance of most states to take the privatization step indicates considerable doubt that it would be an improvement, and there must be lingering concern it could be a lot worse.

A better approach if states now want to rid themselves of the lottery operation problems would be to come clean with the public that the revenue panacea they told people the lottery would bring to their state when they asked them to vote for it was only a pipe dream. Also, the state is struggling to keep the operation viable and it is difficult to see the future will get anything but darker for state lottery operations.

So perhaps its time to ask the people to vote again -- this time to just cash out on their state lottery gamble.

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