Why These Five States Don’t Sell Lottery Tickets

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New York
CNN Business

If residents of Alabama, Utah, Alaska, Hawaii or Nevada wanted a chance to win this week’s record Powerball jackpot, they had to travel to another state to purchase a ticket.

These five states do not offer government-run lotteries or participate in interstate draws with rolling jackpots such as Powerball or Mega Millions. They are the last survivors of the lottery in America.

Since 1964, when New Hampshire became the first to offer a state lottery, 44 states have launched or joined their own multi-state jackpots. (Mississippi was the most recent state to add lotto games in 2019.)

States, often under fiscal pressure, have introduced lotteries as a way to raise revenue without raising taxes. They have found willing partners in gambling companies that profit from running lottery games.

Over 200,000 retail stores and other outlets in the United States sell lottery tickets. In 2019, lottery sales topped $91 billion, according to the North American State and Provincial Lottery Association.

But the five holdouts have a number of reasons why they haven’t joined the rest of the country in embracing state lotteries.

Alabama and Utah ban gambling in their state constitutions, and religious groups in those conservative states have for years blocked efforts to legalize casinos or adopt lotteries.

Utah, where more than 60 percent of the state’s population is members of the Church of Latter-day Saints, has long opposed a lottery.

However, efforts to add a lottery have gained momentum in Alabama, and the state may be moving closer to adopting a lottery.

“Alabama has been trying to push through a lottery since Don Siegelman was elected governor in 1998. Churches helped win a referendum on the lottery the following year,” said Jonathan D. Cohen, author of “For a Dollar and a Dream: State Lotteries in Modern America.

Now, 24 years later, “I think they might be serious this time around as Mississippi finally gets their lottery act together,” he said.

In the case of Nevada, state lotteries have been blocked by the powerful casino industry, which views lotto ticket sales at convenience stores and grocery stores as competition — even though many stores have slot machines instead of lottery tickets.

In the past, pressure to add lotteries often came from neighboring states. This is because when a state adds a lottery, people often cross state lines to buy tickets. The recalcitrant state then has an incentive to keep the revenue from ticket purchases in its own state.

Hawaii and Alaska, of course, have no American neighbors and do not face this problem.

“It allows them to not have a lottery without people crossing the border,” said Victor Matheson, professor of economics and accounting at the College of the Holy Cross. who studies lotteries.

Concerns that low-income households spend a disproportionate share of their income on lotteries compared to wealthier households have also stalled the expansion of the lottery.

“Many states have been reluctant to launch lotteries in the first place,” Matheson said. “They worry about their regressive nature and gambling addiction.”

A investigation of state lotteries by the Howard Center for Investigative Journalism found that in all states where lotteries are legal, stores that sell tickets are disproportionately clustered in low-income communities. And far more money is wagered each year on instant scratch games, which studies show attract more low-income players, than huge jackpots such as Powerball.

Recently, states that have adopted lotteries have emphasized that ticket sales will go to social programs.

But lotteries are a “really reckless way to fund education and other public services,” said David Just, an economics professor at Cornell University who has studied behavioral decisions about lottery tickets. The people most likely to buy tickets are often the same people who rely most on these government programs, he said.

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