Sunday, September 5, 2010
Arkansas Lottery Measuring the lottery's profits
Posted by Max Brantley on Sun, Sep 5, 2010 at 7:04 AM
Religionist bully Jerry Cox shouldered his way on to the front page of the Democrat-Gazette today with the claim that, essentially, the Arkansas lottery doesn't take enough from gamblers. His point is that a smaller percentage of total wagering goes to beneficiaries in Arkansas — here, college scholarships — than in most other states.
True that.
But the story lacked a full discussion of some critical elements of comparing states, though Ernie P. alluded to it. The single biggest expense of any lottery is gamblers' winnings. The more you pay out (that is, the greater the odds are that a player will win), the less you have available in profits.
Payoffs to gamblers and administrative overhead as a percentage of total gambling are good ways to measure lottery performance. Here's a report on that in Arkansas for the year ending June 30. When Ernie P. talks about the dangers of changing prize structure so as to produce greater profits, he's talking about jiggering with the win percentage. You can do that and up your profit, but you can also discourage play if it's too much harder to win. (I say that even as people plug jillions into video poker, the biggest sucker bet in gambling.)
Here's a 2006 nationwide report that breaks down lottery revenue and expenses in a way to show administrative overhead and payout percentage in each state (except Arkansas, which wasn't then gambling). Unfortunately, in this form, it's not possible to compare directly with the Arkansas figures because I can't be sure what expenses are included in the various categories on the state and national reports. In direct winnings, the Arkansas average payout percentage is about that of the national figure, but there are great variances among the states and dramatically different schemes in some states (several have video lottery terminals, for example.) In short, I don't know. But I do know that administrative costs in Arkansas, even with the highly paid executive payroll, are a relatively insignificant part of the total cost picture.
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Comments (9)
Showing 1-9 of 9
How does this idiot manage to worm his way in the press so much? It amazes me how much he swoons the press for attention--and gets it!
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The amount of ink the Democrat-Gazette provides Mr. Cox is disgraceful. This is the same man who said in 2008 that students in Arkansas didn't need the lottery scholarships because they could always find some other way to pay for college ... like incurring tens of thousands of dollars in loan debts. As of last week, more than 28,000 Arkansas students had been awarded lottery-funded scholarships -- a total not as yet reported in the Democrat-Gazette, which continues to use weeks-old data. This total more than triples the number of students awarded Academic Challenge scholarships a year ago - a stat that you will never read in a Dem-Gaz editorial. Plus the scholarship for 4-year college students is $5,000, up from a max of $3,500 provided under the previous Academic Challenge scholarship program, which also limited awards to students whose parents' combined income totaled $65,000 or less.
And every one of those scholarships is a load of spit in the face of Arkansas' public school children, who would like to have adequate (what thin gruel we feed them!) schooling.
Bottom line is that Cox has a number of loyal followers who believe honestly that he is doing the Lords work.
These are the same folks who believe in 'dry' counties, Obama is a Muslim who is not qualified to be President and want to see the Birth Certificate, all Hispanics are here illegally taking jobs and benefits from hard working 'mericans, sex education is creating biblical knowledge and results in more teen-age pregnancies, and of course marriage is reserved only for men and women.
They are a fine lot all right...and of course, they ALWAYS take the high road.
"...every one of those scholarships is a load of spit in the face of Arkansas' public school children,"
JAA, won't you please, please translate that.
Thank you in advance for your urbane manner.
Arkansawyer, perhaps that spit in the face of students is really a matter of
test bias. See link
http://www.youtube.com/watch?v=2RrreVthWRY
Here you go, bejeeus:
Increased funding for college scholarships ensures that the kids who live in areas where the schools are good enough will get to college. Not a bad thing. It also is money not spent on the third or so of our kids who, by the time they're done with elementary school, will never, ever catch up, never have the mental armament they need to be citizens.
God knows, more kids in college is good for my continued employment, but the cost of neglecting the public schools is too high to bear.
In the long run, producing better students from the public schools would improve the colleges and universities, reducing the amount of remediation now required. But we live in America, where everyone is a short-timer and you're only as good as your this quarter's profit-and-loss statement. So screw the kids, eh?
Bill Halter is a very cynical man. I hope I keep having opportunities to vote against him. The possible necessity to vote for him someday turns my stomach.
"But we live in America, where everyone is a short-timer and you're only as good as your this quarter's profit-and-loss statement. So screw the kids, eh?"
Wow, what a sad and distorted view of our schools, our state and our country.
ND '75,
It's not my view, personally, but I think there is a large contingent of folks with power who do view it that way, enough to make it reality.
(Sorry for the late response. I was looking at my profile and realized I'd forgotten this.)
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