The maturing of state lotteries | Arkansas Blog

Sunday, June 1, 2008

The maturing of state lotteries

Posted By on Sun, Jun 1, 2008 at 8:20 AM

More food for thought on state lotteries. California was a pioneer. Now the lottery there is lagging in revenue, along with all of state government. Among the discussion on the table by Gov. Arnold Schwarzenegger -- borrowing from lottery revenues for uses other than schools, the supposed beneficiary. But of more interest here:

Annual ticket sales in the state average $91 per person; the national average is $185. Schwarzenegger contends that adding games, placing electronic ticket machines in big-box stores like Target and making other unspecified improvements would double sales in five to 10 years, producing more than $3 billion a year in new sales. The state would then borrow against the higher revenue to generate $15 billion in instant cash.

"There are some people who say this is exotic, this is gimmickry," Schwarzenegger said to hundreds of business leaders in Sacramento last month. "There is nothing gimmicky or exotic about it. . . . This is the direction to go, because we don't want to raise taxes."

But besides voters, there are other barriers to the governor's plan. One of the biggest is a ban on the most lucrative type of lottery machines, video lotteries, which operate like slot machines. Most of the 14 states that have them have seen their profits soar.

If Arkansas adopts a state lottery, it will be up to the legislature to set the rules. There will be no constitutional ban on video lottery terminals. The state could get in the slot machine business.

Perhaps someone can help me in explaining whether that means the door would also be opened then, at least constitutionally, to pure lottery machines -- i.e. slots -- to go along with video poker, blackjack and other electronic gambling at Oaklawn and Southland. Legislative approval would, of course, be required. We can take comfort in knowing that the legislature has always been tough on granting favors to the state's two racinos.

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