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Lottery May Fuel Dreams but Won’t Fuel Government Spending Addiction

The likelihood of a fuel tax increase means Wyoming citizens may soon be sending more money to government when they fill up at the pump. More fuel tax revenue is not enough to fix Wyoming’s roads, so legislators are still looking for more. The Wyoming legislature will soon look at HB 77, a bill to create a state lottery in Wyoming. However, while lotteries generate eye-popping headlines, they don’t generate jackpots for government.

Lotteries might bring in a lot in ticket sales revenue but that doesn’t mean the government gets much to spend. As shown in the table below, North Dakota, a state with a similarly sized population and a lottery comparable to the one envisioned by HB 77, generated about $6 million in state revenue in 2011. It is unlikely a lottery in Wyoming would bring in much more than that. In fact, according to the Legislative Service Office, the proposed lottery could generate revenues available for distribution to local governments ranging between $5 million and $9 million per year.

This is a far cry from the $135 million WYDOT says it needs to just maintain the existing highway system. Game and Fish alone says it needs another $10 million. If government is looking for new sources of revenue to fuel its spending addiction, the injection from a state lottery will not give it much of a boost.

The injection could hurt more than it helps.

HB 77 would create a new bureaucracy, the Wyoming Lottery Corporation, to manage the lottery. This Lotto Corp is supposed to be a public corporation, not a state agency, and be self-funding. This sounds a lot like the Game and Fish Department, which was also supposed to function on a user pay system and take no general fund appropriations from state taxpayers. Game and Fish now gets about $10 million per biennium from the general fund, and is currently looking for more. So the idea that government organizations can function solely on the funds they generate might work to sell the concept, but it is a losing proposition for state taxpayers.

A consistent trend shows up in surrounding states with a state-administered lottery. Since 2005, with the exception of Idaho and South Dakota, ticket income and prize payouts have increased consistently, and so have administration costs. Since 2008, with the exception if Idaho alone, the proceeds available for state government spending have either stagnated or fallen. 

Lotto IncomeThe last thing the Wyoming government should do is create yet another bureaucracy with ever rising costs based on the false premise that they will be self funding.

Not only could a state lottery end up costing taxpayers money, it could also take dollars away from small business. If people are spending their discretionary income on lottery tickets, they are not spending it on meals at local restaurants or extra chunks of cheese at grocery stores. A state lottery would also take resources away from games. According to Wyoming’s Pari-Mutuel Commission, a government bureaucracy that regulates the racing and wagering industry, “ HB 77 would likely result in a decrease in revenues to the Wyoming Breeders Award Fund and the Pari-Mutuel Commission, due to pari-mutuel bettors switching to the proposed lottery. The revenue decrease to the Breeders Award Fund is estimated at $10,000 to $15,000 per year.”

Government spending doubled in the last 10 years and yet it still does not have enough. That is because government is addicted to spending; facilitating addiction among citizens to feed government’s addiction is not a long-term strategy for prosperity in the state.

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Thursday, 19 October 2017
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