Is the State-Run Lottery Essential Business? | Eastern North Carolina Now

Publisher's note: This post, by dallaswoodhouse, was originally published in Civitas's online edition.

    As noted by CNN, multiple studies in states such as Texas, Connecticut, South Carolina and Minnesota have shown that the majority of people who play instant lotto games have a below-average income.

    As Civitas has pointed out many times, the State lottery stacks odds against the poor.

    John Spry, a finance professor at the University of St. Thomas in Minnesota, has also studied the economic disparity among people who play instant scratch-off games.

    About three out of four instant game tickets sold in Minnesota are purchased by people with below-average incomes, according to Spry. He also cites research that shows in South Carolina, 60% of instant lottery tickets were purchased by people with very low incomes.

    A September 2018 Bankrate study found that 28% of people who earn less than $30,000 per year play the lottery at least once per week compared to 19% of those who earn more than $80,000.

    In December 2019, Bankrate reported that those low-income workers who play the lottery spend 13% of their annual income on lottery tickets compared to the 1% spent by those who earn more than $80,000.

    Of urgent concern, in this time of government forced massive unemployment, considerable research shows that lottery sales spike, when economic conditions worsen, and citizens become more desperate.

    The Associated Press reported during the economic downturn in 2008:

• "In these tough times, many people appear willing to gamble a few precious dollars in the hope of winning instant deliverance from their economic woes.
• More than half of all states with lotteries have reported rising sales over the past six months, and some researchers say financial insecurity might be driving people to risk more of their money than usual on $1 and $5 instant scratch-offs and other daily games in hopes of a big payoff."

    During the last half of 2008, the worst of the 2008 recession, AP reported that

    25 of 42 states with lotteries have experienced higher sales of scratch-off and daily lottery games.

    According to USA Today, the trend continued during the 2011 downturn:

    "Despite a struggling economy - or perhaps because of it - lottery ticket sales have surged across the USA.

    Financial records for 41 state lotteries that end their fiscal year in June show 28 had higher sales than the year before. Seventeen of those states set all-time sales records."

    North Carolina's lottery was created in 2005 and sales have increased every year, including during recent economic downturns.

    Kate Sweeny, an assistant professor of psychology at the University of California-Riverside, said an uptick in lottery sales largely occurs when people feel a lack of control over events larger than themselves, such as the economy.

    However, the current forced economic collapse is unlike any other. The government is ordering many businesses to close. It is forcing people into unemployment and despair. Should state government really be advertising nightly lottery sales? Should it really be encouraging people to make unnecessary trips to convenience stores to buy tickets in a time of social distancing?

    North Carolina as a state and its local governments are currently seeing a revenue boom from its other vice monopoly, state run liquor stores.

    Asheville area ABC Stores are regularly reporting New Year's Eve sales numbers. New Hanover County reports a 50% increase in liquor sales during March.

    Gov. Roy Cooper has declared State ABC Stores an essential business. A question states all across the nation are facing.


    All liquor stores in Pennsylvania have been closed since March 17. Starting Wednesday, the state's Liquor Control Board announced it would re-open its portal for online liquor and wine sales but massive demand has overwhelmed the site.

    In Denver, after the mayor declared liquor stores and recreational dispensaries were "non-essential" and would have to close, people swarmed both, prompting a quick reversal to that order, the Denver Post reported.

    In addition to possibly creating a rush on stores, some addiction experts have argued that closing liquor stores during the coronavirus crisis could cause another health problem: increased instances of alcohol withdrawal, according to the Charleston Post and Courier.

    The American Addiction Centers lists "drastically restricted access to alcohol" as one of the challenges people with problematic drinking habits may face during the pandemic, along with anxiety and loneliness.

    The Civitas Institute has long held that the State of North Carolina should not be in the Liquor business, and continues to advocate the legislature move to privatize liquor sales in North Carolina.

    Nevertheless, North Carolina with state owned liquor stores and South Carolina with private owned liquor stores have both reached the same conclusions. That it is unwise to restrict liquor sales to responsible adults of drinking age during the virus crisis, and dangerous to limit sales to physically addicted alcoholics who could strain an overburdened health care system with cases of acute alcohol withdrawal or simply succumb to it.

    But people don't fill up emergency rooms with physical withdrawal from a lack of buying lottery tickets. While the state would lose revenue from stopping lottery sales some of that revenue would be made up from increased liquor sales.

    For the last decade Director of Policy for the Civitas Institute Dr. Bob Luebke has tracked the budget and moral dilemmas that have come with monopolistic state sponsored gambling:

• "No amount of money can erase the underlying problem. Every time government hands out money from the lottery, it should ask: Doesn't gambling undermine the fundamental messages schools seek to instill in students: working hard, getting a good education and taking responsibility for yourself? It's also hard to ignore the reality that the majority of those that play the North Carolina Education Lottery are low-income people and that the lottery serves as a voluntary tax on those that can least afford it."

    And now the virus has caused a new moral dilemma for North Carolina and her people, that is easily solved.

    We join noted author Tom Joyce who in the Washington Examiner has called for states to halt lottery sales.

• "... suspending lottery sales would give people one fewer reason to go out in public and could marginally help prevent the spread of the coronavirus.
• If states suspend their lotteries, it might not be a popular decision. But the public would be better off for it."

    Italy, Spain, New Zealand, Mauritius, and China are some of the countries that have suspended their national lotteries due to the virus crisis.

    And late last week Michigan Gov. Gretchen Whitmer announced the state was considering stopping in person lottery sale due to health concerns.

    But Gov. Cooper should do more and do it now. Cooper should declare the North Carolina Lottery a non-essential business and should halt lottery sales and the advertising thereof, until the vast majority of North Carolina businesses are operating as normal and people are getting back to work. If the governor will not do the right thing in stopping the state in preying on the desperate unemployed that it helped create, the General Assembly should step in.