Wednesday, September 12, 2012

Arkansas lottery matures; what now?

Posted By on Wed, Sep 12, 2012 at 6:50 AM

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That didn't take long. Arkansas started selling lottery tickets in September 2009 and three years later we have solid evidence — in a 7 percent drop in sales the last two months, according to an article in the Democrat-Gazette (pay wall) — of the inevitable maturing of the lottery.

The experience in every other state told us that, apart from population growth, percentage of free income is more or less unchanging. See Texas, to name one, where net lottery income has more or less been flat for nine years.

Unless you can find ways to encourage more people to separate themselves from more of their money, the growth arc of lotteries won't be great. Arkansas Lottery officials blame the economy and weather for the recent downturn, though there's some research that indicates hard times actually encourage desperate people to gamble more.

Whatever. The Arkansas Lottery can't count on exponential growth to expand the scholarship pool it finances, so legislators are figuring out ways to reallocate the money. This could mean future fights between two-year and four-year college students. One proposal would stairstep the money — more for each successive year along a degree path. This inevitably would favor those better able to pay in the first place, not simply those with better academic achievement. As the percentage of college costs paid by the lottery scholarships continues to decline, the likeliest dropouts will continue to have a high correlation with financial pressures.

Arkansas, like other states, will continue to search for ways to increase gambling. More marketing, more games. You can see why the dearly departed Ernie P. had an interest in keno and video lottery terminals. Illinois has even started online lottery ticket sales.

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