Lottery Not Delivering Expected Windfall to Michigan Schools

Thirty years ago, anyone caught "playing the numbers" in Michigan would be in serious trouble with the law. Today, the residents of Michigan spend over $1.7 billion annually on a variety of legal, state-run lottery games: the Daily 3, Daily 4, Michigan Millions, the Big Game, Michigan Roll Down, and Instant Tickets.  But the reality of state lotteries and the way they are marketed would make a snake-oil salesman blush.

The state's lottery was presented to Michigan voters as a vehicle to raise state revenues without having to raise taxes.  Objections to filling the state's coffers through a gambling scheme were countered with three arguments: 1) People are going to gamble no matter what; 2) The lottery is one of the most benign forms of gambling; and 3) It's for the children.  In 1972, Michigan voters chose to adopt the lottery by a 2-to-1 margin in the belief that it would add substantially to the funding for education.

As in almost every other state that created a lottery in recent years, the Michigan Legislature didn't treat the proceeds as an add-on for education; rather, it more often than not simply reduced appropriations for education by roughly what the lottery put in.  What the lottery produces for education is hardly a windfall anyway—accounting for a puny 4 percent of the total funding for Michigan public schools.

Despite rather dismal odds, states routinely promote their lotteries with get-rich-quick slogans that sometimes denigrate the values of hard work, initiative, responsibility, perseverance, optimism, investing for the future, and even education.  Here's a sample:

"All you need is a dollar and a dream" (New York).

"Work is nothing but heart attack-inducing drudgery" (Massachusetts).

"How to get from Washington Boulevard to Easy Street" (Illinois).

"His [Martin Luther King's] vision lives on.  Honor the dream—D.C. Lottery"

An ad in Illinois actually featured a man mocking others who invest in stocks and bonds; the lottery was depicted as the more fashionable and respectable preference.

The state of Michigan spends over $18 million annually to promote its lottery—and its ads and press releases aren't any better than those cited above.  They applaud people with "persistence" and urge them not to "give up" buying lots of tickets.  They urge people to "pool your resources" not for productive investment in wealth-creating, entrepreneurial ventures but for the purpose of realizing the American Dream through lottery tickets.  One particular Michigan ad showed a man standing at a lottery counter complaining that he has a better chance of being struck by lightning.  Zap!  A lightning bolt leaves his hair singed.  He responds, "One ticket, please."

State governments go to great lengths to sugarcoat their lotteries, stressing their voluntary nature.  But it remains true that lotteries depend most on those least able to afford them.  While the average player spends $313 per year on the lottery, those with incomes of less than $10,000 spend $597. African-Americans spend $998 compared to $210 for whites.  High school dropouts spend four times as much on the lottery as do college graduates.  More than half of all lottery tickets are bought by just 5 percent of those who play.  The National Opinion Research Center estimates that problem gamblers (those addicted to gambling and whose families often suffer as a result) account for 14 percent of total lottery revenues. 

When it comes to lotteries, governments actually wear three hats: They are the promoters, the regulators and the enablers of self-destructive gambling behavior.  To help rectify this situation, the Michigan Lottery actually provides $1 million in funding for compulsive gambling programs annually. While government does not have an especially good track record when it tries to remedy social ills, should we celebrate when it succeeds in doing the opposite? A strong case could be made that the state of Michigan should not even be in the gambling business at all.

At the very least, citizens ought to know that when all the hype and hoopla is cleared away, state lotteries aren't the bonanza for education they were sold to be.  States that would prosecute you or me for similar promotions are guilty themselves of some rather morally dubious marketing.

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(Michael E. Heberling, Ph.D., is an adjunct scholar with the Mackinac Center for Public Policy in Midland, Michigan.  Permission to reprint in whole or in part is hereby granted, provided the author and his affiliations are cited.)

Summary

In 1972, voters approved the Michigan Lottery, hoping it would prove a funding windfall for education. Today it does little for schools. But its government sponsors do spend $18 million per year on advertising that denigrates hard work and initiative, while luring money from those who can least afford to throw money away. Michigan should be a trendsetter and get out of the lottery business.

Main Text Word Count: 691

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