NC lottery draws losing card with critics

While the state legislature considers expanding the N.C. Education Lottery, experts claim it reaps low rewards and bears an unseen cost to the state — gambling addictions and regressive taxes.

Legislators have debated adding $10 million in advertising funds and allowing for the development of electronic gambling apps, resulting in $53.2 million for education funds, according to N.C. Education Lottery spokesman Van Denton.

“The main reason the lottery is here is to raise money for a good cause,” Denton said. “It makes a big difference in every county across the state.”

Last year, the lottery gave $522.4 million to education funds for classroom teachers, school construction, pre-kindergarten programs, need-based scholarships and financial aid.

But Matt Ellinwood, a policy analyst for the left-leaning N.C. Justice Center, said changes in the law have diverted funds and decreased per-pupil spending with regards to inflation statewide.

“The idea originally was that it would just be extra money from what we already spend on education,” he said. “There was that initial bump right after the lottery started, but now we’re spending less per student.”

He said the lottery functions as an extremely inefficient way to generate education funds because only a part of each dollar goes to education.

Sarah Ovaska-Few, a reporter for the left-leaning think tank N.C. Policy Watch, said poorer North Carolina counties have higher per capita sales of lottery tickets.

Halifax County has the second-highest per-capita lottery ticket sales, but 27.4 percent of its population were living below the poverty line in 2013 — 10 percent above the state average of people living below the poverty line. Denton attributes higher sales in these areas to outside factors, such as increased traffic from I-95, which runs through Halifax County.

Ovaska-Few said while I-95 might play a role, she’s skeptical.

“If the lottery is arguing those are all interstate sales, I’d like to see where they’re getting that information from,” she said.

The lottery, though voluntary, can be seen as a regressive tax on the state’s impoverished residents, Ellinwood said.

“When you look at where the lottery is sold and marketed, it’s not like everyone has an equal chance to play the lottery,” he said. “We’re funding our education system by introducing a whole new generation of people to potentially debilitating gambling addictions.”

Tim Fong, co-director of the UCLA Gambling Studies Program and a professor at UCLA, said it’s extremely difficult to quantify the addictiveness of different gambling forms.

“When you make it easier to gamble, you’re going to uncover men and women who have a vulnerability to gambling addiction,” he said.

The lottery uses $1 million to fund the North Carolina Problem Gambling Prevention Program, which runs a 24-hour help hotline, among other forms of assistance.

Fong said the lottery can serve as entertainment for individuals, but safeguards, like maximum yearly expenditure locks on electronic devices or monthly playing statements, could keep people safe.

David Just, professor of economics at Cornell University, said the lottery doesn’t function like other entertainment — consumers, who tend to live very close to the poverty line, spend the same amount of money on the lottery even after they lose income, which doesn’t happen for other forms of entertainment, like movies.

But Denton said the lottery can be a fun game, even if some abuse it.

“The lottery should be played for fun and with money that someone has set aside for it,” he said. “The first time that the lottery doesn’t feel like fun for someone is probably a sign that they’ve played too much.”

Just said lottery players use the game as a last ditch effort to get rich, but surveys show that those who win often aren’t happier than people who had recently become quadriplegics.

“Their idea of what’s going to happen is (winning) will remove barriers in their life and they can achieve whatever they want,” he said. “But no amount of money can do that.”

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