One of the methods states use to build public support for gambling is to say the proceeds will go to support public schools, senior citizens or some other broad-based constituency.
Of course, this is just an accounting gimmick that would make Enron executives smile. Any money set aside from the lottery or casinos just means less revenue from the general fund. Even worse, states are starting to go back on promises made to fund special programs because of shortfalls in gambling revenue.
Take Tennessee, which announced plans to scale back funding from the lottery to pay for college scholarships for in-state students. Georgia was the first state to use lottery revenue to pay for college tuition, but the program there was also scaled back because of a massive budget shortfall.
The changes in the scholarship program essentially takes away the one argument for gambling. At least someone was benefiting from the gambling losses. But the reality is that gambling revenue is an unsustainable way to fund government operations. Gambling – through the lottery or casinos – is also a regressive tax that hits the poor and elderly the hardest. In a sense, poor people that play the lottery finance the college scholarships that usually go to middle class families. That’s also not a sound policy over the long term.










