Virginia's Lottery - Beneficial Or Not?

VIRGINIA'S LOTTERY - BENEFICIAL OR NOT?

In 1987, Virginia residents voted on a referendum for a state-operated lottery, and even though, according to an article in the Richmond Times - Dispatch on February 9, 2003, the majority of politicians believed that the state should not be "in the business of promoting gambling" (Robertson), Virginians voted overwhelmingly for the lottery, and consequently the Virginia Lottery was born. According to the Virginia Lottery's Web site, in 1999 all proceeds from the Lottery were allotted to local public schools, to be used for educational purposes, and in 2000 Virginians voted affirmatively on the State Lottery Proceeds Fund, which was an amendment to Virginia's Constitution that directed all Virginia Lottery profits go to education. Every day people purchase Lottery tickets in the hope of hitting the "Jackpot" or even just making a few "extra bucks", and believe they are justified because the money goes to help local schools, but should Virginians rely on the Lottery for the funding of their schools?

Does the Virginia Lottery really help our schools? According to an article from MONEY Magazine (1996), there are two reasons that lotteries don't have as much tax benefits as politicians and the Lottery commission would have us believe. Firstly, even though lottery sales are huge, they do little to help State budget issues, as the proceeds that the schools actually receive are much less than the sales give the impression of what schools should obtain (Keating 144). For example, according to the Virginia Lottery Web site, in 2004 lottery sales were over $1.2 billion, but only a little over $408 million was given to the State Lottery Proceeds Fund (retrieved September 26, 2005 from the World Wide Web: www.valottery.com/money). This seems like a large amount of money. However, if you divide the amount of proceeds by the number of public schools in Virginia (there are approximately 1,850 public schools according to the Virginia Department of Education at http://www.pen.k12.va.us/VDOE/dbpubs/Fall_Membership/2004/fm_sch_grade.xls), you will find that each school would receive around $220,000, a very small portion of the cost of running a school. Secondly, according to Peter Keating, the author of the article in MONEY Magazine (1996), most state politicians feel that lottery profits are "found money" that is used to "close budget gaps rather than cut taxes or spending" (144). This is not to say that the money generated by the lottery is not useful. However, it could be replaced by a small increase in taxes, which may encourage the government to spend more wisely.

Although the Virginia Lottery employs around 300 people and helps local businesses with revenue from selling tickets, does it benefit the community in general? Another reason for finding other forms of revenue is the cost on society that the lottery has produced. According to an article in Region Focus (2002), the majority of lottery tickets are purchased by minorities and low income people. The article goes on to state that according to the study "Who are Lottery's Biggest Spenders?" on average, blacks spend four times as much on lottery tickets as whites, players without high school diplomas spend a great deal more than those with college degrees, and low income households spend twice as much as higher income households (Nash 18-21). The fact that