I was once a supporter of the lottery. In the eight years I have been in the Virginia House of Delegates, I have been bombarded with literature from those who favor it and those who oppose it. I have attended committee hearings on the bills that have been introduced. I have read and listened carefully to all the arguments.
I am now convinced that a state-run lottery would be a big mistake. In fact, it was the arguments and data presented by the proponents that convinced me that the lottery would not do what they say it would do and that its costs would exceed its benefits.
The proponents claim that, after two or three years, the lottery would yield Virginia approximately $400 million a year. They admit that 45 percent of each dollar collected would go to prizes, 5 percent to the ticket sellers and 5 percent to administration and advertising. This would net the state 45 cents on each dollar collected.
Therefore, the state would have to sell $888 million of lottery tickets to net the $400 million claimed by proponents. There are 1.6 million families in Virginia, and even the proponents admit that if half the families regularly played the lottery, that would be extraordinarily high participation. Assuming these 800,000 families did play regularly, they would have to bet more than $1,100 yearly for the state to net the $400 million. That is certainly more than the harmless $2, $3 or $5 per week the proponents claimed would be bet.
Furthermore, if the $1,100 figure were merely an average and half the families were betting half that amount, then the other half would have to be betting half again as much, or nearly $1,700, to maintain the average of $1,100. In fact, many people would have to be betting $2,000, $3,000 or even $5,000 a year to achieve the proponents' claims.
To me, this was an astonishing and frightening analysis. All of my assumptions were conservative and gave the proponents the benefit of the doubt on all their claims.
I still asked myself whether it would be worthwhile to raise the money this way. To help me decide, I examined the figures for the state's sales tax. Each 1 cent of the sales tax nets the state approximately $450 million a year. Is it really worth setting up a state-run lottery to raise $400 million per year that would not even reduce the sales tax 1 cent?
To answer this question, I did further analysis and listened to the remarks of a former Connecticut attorney general who had also been a supporter of the lottery and came to change his mind. I learned that when the state gets into the numbers business, illegal betting on the numbers increases. The bookmakers go into the communities where the betting on numbers is high and say, "Look, I'll pay on the same number that the state pays on every day, and I'll pay a premium over what the state pays. I don't report it to the authorities and therefore you don't have to pay taxes and you also get more. Don't be a sucker. Don't be a fool. Play with me."
The argument is enticing and persuasive. The incessant advertising by the state that betting on the numbers is legal and "okay" lays the foundation for the illegal bookmakers to make their pitch. People begin to play the illegal numbers more and more, betting their incomes in the huge amounts I have calculated -- money that has to come out of the food, rent, clothing, entertainment and other parts of the family budget. Some become compulsive gamblers. The state then sets up treatment centers for compulsive gamblers, in much the same way it looks after alcoholics. These programs cost millions of dollars a year.
The state lotteries find that the novelty wears off, and eventually people do not bet as frequently. To increase sales, the state has to increase advertising to persuade people to gamble more. In New England, sales have fallen off dramatically, and several states have had to combine their lotteries to get sufficient sales.
An analysis of the social and dollar costs (only some of which I have described) against income shows that the lottery is a loser.
I voted to place the lottery on the ballot in November because I have an abiding faith in the democratic system. I believe that, if we get out the word on the true costs of the lottery, people will reject it.
Bernard S. Cohen is a member of the Virginia House of Delegates from Alexandria.