Lottery: An economic stimulus? | Arkansas Blog

Wednesday, June 17, 2009

Lottery: An economic stimulus?

Posted By on Wed, Jun 17, 2009 at 2:31 PM

Don't count on it, based on this assessment by Roby Brock in Talk Business.

Dr. Tom Garrett, an economist with the Federal Reserve Bank in St. Louis, is skeptical that the impact will be noticeable.

“The lottery will have little impact, if any, on the overall Arkansas economy,” he says bluntly.  “Basically, the lottery is a new consumption alternative, so people will spend their money on the lottery instead of other things, such as movies, restaurants, and other entertainment. It is simply a reallocation of spending dollars by Arkansans.”

A spokesman for Lt. Gov. Bill Halter, the Father of the Arkansas Lottery, takes some exception and Roby explains this is only part of his look at the subject:

Absent from these expert analyses is any mention of the use of lottery net proceeds, which will  triple the annual amount of state-administered scholarship funding for Arkansas students while lifting existing income restrictions.  Nor do the experts note that Arkansas residents already spend money on lottery tickets … in five surrounding states.   One of them talks about attracting new money from out-of-state players, seemingly unaware that the top lottery sellers in Missouri, Oklahoma and Texas are all on the Arkansas border, selling tickets to Arkansas residents.  Lots of holes here.

Garry Hoffmann
Communications Director
Office of Lieutenant Governor Bill Halter

Roby Brock responds:

I see there is some concern that my analysis doesn't compute the scholarships and long-term impact of the lottery.  I agree and have been working on that angle as a stand-alone piece.  Today's story was merely to address the immediate and short-term potential benefits of the lottery on the economy.  I sincerely hope that there will be some long-term benefits for education, workforce and incomes from the net proceeds.

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