Don Harris wrote:
> Lottery Facts -- Lousy Economics

Thanks for the information, Don.  I have to admit I also have some
serious reservations about states running gambling operations.  And
anything that will put more money in the hands of politicians is
automatically suspect.  But I can't resist playing devil's advocate with
some of your points :)

> 1. ... A survey of 1,200 California stores taken by the
> California Grocers Association reported an average decline in food sales of
> 7 percent since the imposition of the California lottery.

I appreciate your point about a lottery drawing money away from other
businesses.  That is actually one of the better arguments against it.
Then again, America is a nation of many overweight people ... buying
less food is not automatically a bad thing.  I wonder if it had any
influence on the *type* of food being bought?  Lottery tickets vs. junk
food might not be such a bad tradeoff....

> 2. States only get about a third of all lottery revenues. Thus, for
> Tennessee to get the often-projected $200 million in lottery money,
> Tennessee businesses will have to forego over $600 million in sales
> revenues. On top of that, state government will miss out on $36 million in
> sales tax revenues.

Tennessee businesses are already foregoing millions of dollars (I have
no idea of the exact amount, but I'm sure it is huge) in sales revenues
because Tennessee is surrounded by other states which have legalized
gambling in one form or another.  Right here in Chattanooga how many
hundreds or thousands of people drive over the line to Georgia to buy
lottery tickets.  When they go, they don't just buy tickets, though ...
they buy groceries, gasoline, and all sorts of other things.  Our
businesses lose out on that revenue and our sales tax base takes a
double hit ... not only do we lose the sales tax on the money spent for
the lottery tickets, but also on the money spent for the other items.
If Tennessee had a lottery it is likely that fewer people would drive to
Georgia (or to Kentucky or Virginia or Missouri from other areas) and
spend money there.  Anything that keeps more Tennessee money in
Tennessee can't be all bad.

Also, there is no reason the state can't tax lottery tickets if the
Legislature wishes to.  Either write the law so as to add the tax on top
of the price (so it costs $1.09 for a dollar ticket), or include sales
tax in the price and only put 91 cents from each ticket into the
prize/scholarship/administrative pool and treat the rest as sales tax
revenue.  No big deal either way.

> 3. A lottery in Tennessee may make a big problem get even worse.

It is possible that it may make the bankruptcy problem marginally worse,
and that is a valid cause for some concern.  I doubt it will make it
significantly worse just due to the simple fact that any Tennesseean who
wishes to gamble can already do so quite easily.  We have a long, narrow
state bordered by several states with legalized gambling ... lotteries
in Georgia, Virginia, Kentucky, and Missouri ... dog tracks in Alabama
... and of course casino gambling in Mississippi.  Not to mention the
many illegal forms of gambling that already flourish in this state.  I
think there are several flaws in the TN lottery as proposed, but I don't
think one of them is the creation of a large number of new gamblers and
their associated financial problems.

Vote whichever way your conscience and common sense tell you, but don't
believe everything *either* side tells you.  There are legitimate pros
and cons either way.

Joe Dumas