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Come on, big money 

Come the July deadline, paid signature gatherers should have a sufficient cushion to put a state lottery amendment on the ballot.

The Bailey family of Little Rock — their wealth comes from real estate, particularly apartment projects in several states — is committed to underwriting the campaign for ballot qualification. They are believers in higher education, which lottery proceeds would help with scholarship money. As business people, they see it as a highly leveraged investment. If $2 million is enough to qualify and pass the lottery amendment, they figure, that's a paltry investment against a return of hundreds of millions in scholarships over the next decade.

It is not entirely clear who will pay for the campaign to pass the amendment once it is on the ballot. The backers of the amendment, proposed by Lt. Gov. Bill Halter, obviously would like to have grassroots support. The lottery website, hopeforarkansas.org, is inviting on-line contributions.

I suspect makers of software and hardware for state lotteries will happily support the campaign in the fall. I'm not sure it matters much. I'll be surprised if the lottery isn't approved by a wide margin. Lotteries — in the minds of most — seem benign pastimes, unlike smoky casinos with their scantily clad cocktail waitresses, liberal booze and around-the-clock appeal to vice. There's also the feel-good promise of a scholarship fund, separate from General Assembly appropriation.

If the experience elsewhere is an indicator, a big chunk of the money will go to kids headed to college anyway. But that's exactly why such a middle class entitlement program will have high appeal, particularly on jingoistic grounds. Arkansas college scholarships will keep many kids in Arkansas who might have been tempted to seek education elsewhere.

Some might prefer that the state not be a vice purveyor. Why not take over tobacco and booze sales, too? Others will argue the regressive nature of the hidden tax and its impact on poor people. But I don't expect these arguments to persuade many.

My biggest fear about the lottery is the near-certainty of unintended consequences given the legislature's power over the new game. With the repeal of the anti-lottery prohibition in the state Constitution, it's hard to believe that the Oaklawn and Southland racinos won't eventually argue that they could be home to state “lotteries” in the form of pure slot machines, craps tables and roulette wheels. The tax take would be devoted, naturally, after a healthy racino rake, to college scholarships. The amendment will certainly open a pathway to Indian casinos in the state.

Make no mistake that the end of the lottery prohibition allows the state to offer any kind of gambling it wants in the name of a lottery, particularly the video lottery terminals that are effectively slot machines. Other states are busily moving to these sorts of video games to shore up lagging lottery revenues.

The lottery amendment says proceeds must supplement, not supplant, support for higher education. But how, really, can you determine that? Many factors affect the level of support the legislature is willing to provide, or not provide, higher education.

California now is an indication of where lottery promises can lead. It was supposed to be the salvation of schools there. But revenues are eroding and the governor seems to want slot machine-style games to boost them. He also would like to borrow against the lottery reserve fund. Can't happen here? Don't bet on it.

 

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