Scratch and Spend: A Review of the Proposal for an Alabama State Lottery and Subsequent Finance Structure Revisions
Ryan Brauchler
In addition to entering adult bookstores, buying tobacco, and purchasing fireworks, acquiring a scratch ticket upon turning eighteen has become a societal norm. These small, rectangular sheets of cardstock, emblazoned with flashy colors and easily identified logos, entail a minute but distinct possibility for a significant shift in fiscal prosperity. Beneath the brilliantly flashing Power Ball logos, monochromatic scratch card shavings, and delusions of grandeur is a covertly veiled source of state income that, if utilized optimally, possesses a unique potentiality for utilitarian benevolence. As governor of the great state of Alabama, I am faced with a dilemma. In the presence of a dauntingly mismanaged budget and political pressure from both sides, I have composed this case study as a method by which I justify and outline my comprehensive plan to institute a state lottery in Alabama. It is with the best interests of my constituency in mind that I set forth the following:
The negative externalities associated with a perpetually crippled state economy pose a unique challenge to extant policy that necessitates governmental intervention through the most pragmatic and impactful means possible. Faced with the reality of a financially troubled state economy, it becomes evident that the institution of a state-sanctioned lottery in acquiescence to a fervent political action group is the most universally beneficial and easily administered measure with which to raise needed funds. The $57.436 billion generated by lotteries last year poses a potentially significant source of revenue for the citizens of Alabama. (NASPL, No Date) In order to qualify this proposal, three pertinent correlations must be examined and confronted:
1. The lottery’s potential for producing economic stability
2 . Crime rates and the incidence of pathological gambling
3 . Regressivity
Through a potent combination of public programs, investments, taxes, and regulations concurrent with the National Gambling Impact Study Commission’s (1999) suggestions, the newly implemented Alabama state lottery will optimize the financial situation of the current state government and minimize the prevalence of increased crime rates, pathological gambling, and the traditionally regressive nature of state lotteries. Several annual longitudinal studies will be administered to track progress and analyze the potential for negative socioeconomic implications. By examining closely and interpreting correctly the incidental effects of lotteries on crime and income, more attention can be diverted to implementing a streamlined and effective fundraising lottery.
Background
The first modern lottery in the United States began humbly in New Hampshire in 1964 as a “sweepstakes” to sidestep legislation prohibiting lotteries. In the years since, lotteries have proliferated globally to include over 100 foreign nations and 42 of the 50 states. Clotfelter, et. al (1999) put into perspective the expansive growth of lottery revenue through their findings on the proliferation of lotteries in the United States, comparing the $2.0 billion in total sales in 1973 with $35 billion in 1997. The expansion of lotteries since their modern inception has been nearly exponential in both the number of states adopting lotteries and the amount of revenue gained from them. (Mikesell, 1994; Miyazaki, et. al, 1998) To quantify, Mikesell (1994) found that lottery sales grew an average of 22.3 percent annually between 1980 and 1991 and 12.6 percent annually between 1992 and 1996. In 2006, revenues reached a record high of $57.436 billion, and that trend...continued in print edition.
