State Lotteries Stagnating?

Published July 1, 2008

Has the day arrived for states to “cash in” on private payoffs from lotteries, leaving this business to the pros? Policy analysts are asking the question as lottery revenues in many states are coming in below expectations, leaving less for state coffers without tricks or gimmicks.

In an article last year for the Gambling Compliance Ltd. Web site (“US Lotteries Maturing, Looking to Counter Player Fatigue”), business reporter Scott Van Voorhis wrote, “State lotteries across the US are turning to ever-higher priced instant tickets, sometimes up to US$20 each, and innovative marketing tricks, in their bid to find new growth in an era of stagnating revenues.”

‘Decreasing Interest’

Michael LaFaive, director of fiscal policy for the Mackinac Center for Public Policy and senior managing editor of the Michigan Privatization Report, said, “State-sanctioned lotteries are being forced to grapple with decreasing interest in their product–gambling–and a corresponding decrease in revenue derived from lottery games. This makes it a good time to consider privatizing.”

“Lottery privatization makes sense in a number of ways,” agreed Leonard Gilroy, a certified urban planner and director of government reform at the Reason Foundation in Los Angeles.

“First, it’s difficult to argue that running a lottery is a core function of government,” Gilroy said. “Put simply, businesses are best at running business, and government is best suited in a regulatory and oversight role to make sure that the public interest is protected.”

John W. Skorburg