New State Lotteries?
As of August 2004, only ten states had no lotteries: Alabama, Alaska, Arkansas, Hawaii, Mississippi, Nevada, North Carolina, Oklahoma, Utah, and Wyoming. Hawaii and Utah permit no types of gambling at all. Alaskan politicians have shown no interest in a lottery. Wyoming politicians have stated publicly that they do not want to expand gambling options in their state. Lotteries are also long shots in Nevada and Mississippi because of the tremendous growth of casino gambling in these states.
However, polls conducted during the early twenty-first century in Alabama, Arkansas, North Carolina, and Oklahoma show strong support for lotteries that would benefit education in those states:
- A June 2002 poll performed by the Mobile Register and the University of South Alabama found 52% approval for a statewide lottery. Approval rose to 75% for a lottery dedicated only to educational programs.
- A poll conducted by the Arkansas Democrat-Gazette in August 2002 showed a 51.9% approval rating for a lottery conducted to fund government programs. Support was slightly higher (58% approval) for a lottery with funding dedicated only to educational programs.
- Likewise, a poll conducted during March 2002 by The Oklahoman newspaper and the University of Oklahoma found 68% approval for a lottery in general and 76% approval for a lottery to benefit education.
- The North Carolina House of Representatives voted in September 2002 to prevent a statewide lottery referendum from appearing on the ballot in November 2002, despite a survey by Mason-Dixon Polling & Research showing that 58% of respondents supported a lottery in the state.
As of August 2004 North Carolina shows potential for adding a state lottery in the near future. North Carolina Governor Mike Easley is a strong proponent of a state lottery to fund education programs. However, the state's Republican party and other opponents have fought measures to introduce a lottery. With the advent of lottery play in Tennessee during early 2004, North Carolina is completely surrounded by lottery states.
Oklahoma voters overwhelming approved a lottery to fund education in November 2004. The measure was supported by Governor Brad Henry who made the lottery a key component of his successful campaign for the governorship. Following the election, Governor Henry wrote on his Web site (www.governor.state.ok.us) that he was reviewing applications for positions on the state's new Lottery Commission, and concluded that "the sooner the lottery is up and running, the sooner our children—and our state—will reap the benefits."
Attempts at a National Indian Lottery
The Coeur d'Alene Indians of Idaho have been trying to start a national lottery since 1995. The National Indian Lottery would allow residents of all lottery states to dial a toll-free number at the reservation and register numbers to be played in each drawing. Players would pay using a credit card. The plan was approved by the National Indian Gaming Commission (NIGC), and the Coeur d'Alenes had already contracted with AT&T to set up the phone lines when state attorneys general from ten lottery states challenged the plan. They warned AT&T that the company's participation in the lottery program would be illegal. The company pulled out of the deal and was sued by the Coeur d'Alene Indians. AT&T countersued and was backed up by U.S. District Judge Edward Lodge, who ruled that the national lottery would violate federal law.
In March 2002 the Ninth U.S. Circuit Court of Appeals overturned the ruling. The court ruled that the states had to take their grievances about the lottery to the NIGC instead of pressuring AT&T to not participate. As of August 2004, the Coeur d'Alene Tribal Council has not decided if it will pursue the phone lottery further. The tribe tried to run the lottery over the Internet during the late 1990s but gave up after the attorneys general of several lottery states filed suit.
COPING WITH "JACKPOT FATIGUE." A huge problem facing the lottery industry is called "jackpot fatigue." Lottery consumers demand higher and higher jackpot prizes to get excited about lotto games. However, individual states cannot increase jackpot sizes without either greatly increasing sales or decreasing the portion going to public funds. The first option is very difficult to achieve and the second is politically dangerous. Jackpot fatigue has driven increasing membership in multistate lotteries, such as Mega Millions and Powerball.
PRESSURE FOR INCREASED REVENUE. Even as they cope with jackpot fatigue, many lotteries also face pressure to increase the amount of profit going to government programs. Several states are considering decreasing their lottery payout in order to raise much needed funds. Opponents argue that cutting prize payouts will reduce sales, making it nearly impossible to increase state revenues.
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