Getting the state out of the booze and gambling industries

My state, North Carolina, passed an "education lottery" bill back in 2005. Supporters pointed to the fact that many of my fellow citizens were already playing the lottery in neighboring Virginia and South Carolina; and that a sizable portion of the revenues (35 percent) would be funneled into the state's education budget, and the funds are needed.

Critics, on the other hand, pointed out that the lottery experiences of other states indicated that those lofty promises were rarely met; and when they were, the funds didn't increase the education budget, but replaced dollars that were (thanks to the lottery revenues) diverted to other purposes; that the lottery is, or at least includes, a very regressive tax on poor people (who make up a sizable portion of the lottery player demographic); and that lotteries are actually a tax, and a hidden tax at that.

So who's right? Hard to say, but a 2007 New York Times investigation found that states aren't delivering on that promised windfall for education. Here in North Carolina, our governor recently proposed diverting more than $88 million for general budget needs. Understandable, given the budget crisis we face; but contrary to the promises the lottery was sold under. (It should be pointed out that Perdue cast the tie-breaking vote to as Lt. Governor back in 2005.)

And therein lies the rub. If it takes lies to get a lottery, you can bet your bottom dollar (ha!) that the lies won't stop there. Lotteries enrich the winners and the lottery-management company first and foremost; the state contracts with a private business to run the thing. This is no different than what one will find in Las Vegas except the state is not involved (save for licensing and regulating, as with any business). Lotteries also wind up hurting school funding, for a variety of reasons -- primarily, though, because the funds serve to replace funds moved elsewhere, rather than adding to the revenue base. It's bait and switch.

Here's another problem: As lottery revenues have fallen short of projections in our state, the push is on to attract more gambling. The current North Carolina focus is on "core gamblers" -- those who account for 80 percent of lottery business. Wonder what percentage of these folks are problem gamblers? I don't expect to see a state-funded study of lottery demographics any time soon (political third rail, that one), but the wealthy, I'd surmise, won't be heavily represented among "core gamblers" in the NC Education Lottery.

And another: According to the News & Observer, education funds from the lottery are primarily being used to build new schools in areas experiencing population declines.

I believe gambling is a sin that violates the principle of earning money for the work you do. Yes, it gets shadowy around the fringes of the gamble that is investment. It also gets shady when one follows the money, particularly where private sector gambling is concerned. But I also believe it's an individual's decision -- a sin, but not a crime. What makes no sense whatever, though, is to declare it illegal for private persons to start a gambling enterprise (or participate in a form of gambling the state doesn't endorse), but sanction it for the state's use. (The same applies to the sale of liquor in North Carolina, which is state-controlled for no good reason. And, for the record, I believe drunkenness is a sin, but drinking in careful moderation is not -- and I respect the decision of abstainers very much.)

Either ban it altogether, or allow private companies to run gambling operations and tax/regulate them, as with everything else. Don't pretend the money's "only for education." It's for whatever use the state has for it.