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Bahamas debates starting national lottery

Jun 29, 2004, 2:47 pm

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Chairman of the Gaming Board, Kenyatta Gibson, MP, announced to parliament last week that the Gaming Board is currently reviewing the feasibility of The Bahamas introducing a national lottery. To assist in the decision-making process, the Gaming Board has undertaken a comprehensive study on various authorised lotteries throughout the world and the current status of illegal gambling in The Bahamas.

While some persons feel that it can be harmful, others believe that if properly controlled, a national lottery can be beneficial to all aspects of the Bahamian community, including education, culture, sports and the economy.

The Nassau Guardian gives a brief review of some of the pros and cons of operating national lotteries.

As recent as 1963, lotteries were banned in every state in America. Today, approximately 40 states have legalized state-run lotteries. Their revenues fund a variety of initiatives, including education, economic development, transportation, prison constructions, and youth service programmes.

Arguments against

Not all individuals and groups who oppose lotteries and gambling form their view solely on the basis of moral conviction and religious belief.

There are concerns that legalizing gambling could have a devastating effect on the poor, those who live in the 'grassroots' and "inner city" areas, or the lower socio-economic. For a person mired in poverty, the lottery could epitomise one of the only vehicles of quick elevation out of their economic state. They will gamble and risk more than they should resulting in unpaid bills, and a further plunge into financial crisis, as every penny spent on gambling represents a deprivation to other areas.

Notwithstanding this, for those who will not be 'gambling with their last dime', purchases of lottery tickets does not necessarily replace payments and purchases of other items.

Another argument against the national lottery is that it undermines the ideals of the importance of work and savings, replacing them with a 'get rich quick' philosophy that few lottery players ever enjoy.

Bahamians should be taught that one extracts in direct proportion to what one invests, and the lottery directly attacks this. Further, people should not be given the idea that their problems can be solved by winning the lottery.

The question rings loud, is support for a national lottery fuelled by our burning desire to give money to note-worthy initiatives? Or are we motivated by personal greed and a burning desire to have a chance to win the big jack-pot that lotteries offer?

On an individual basis, the odds of winning the lotto are so infinitesimally small that it may not be a good use of one's money. It's said by some that one may have a higher chance of being struck by lightening than to win millions from paying the lotto.

The expectation that millions of dollars would be generated by a national lottery assumes that demand for a lottery can sustain itself. Many opponents suggest that it likely can not. Since the costs of operating a lottery are initially fixed, countries with relatively small populations, like The Bahamas, must surrender a larger portion of lottery revenue to administrative costs.

In the U.S., it is estimated that roughly half of each dollar is given back to gambling patrons in the form of prizes. Another 14 cents are used to cover administrative and retailing expenses, and 4 cents are held in a reserve as part of a "rainy day fund." Remaining funds about 32 cents per dollar- are divided among the various ear-marked initiatives.

Governments are cautioned against relying on a national lottery to provide a long-term revenue stream, the outlook may be poor as some estimate that it takes about three to five years for gambling interests to drain the existing consumer base. This occurrence is known as "lottery fatigue": people lose excitement about either the game itself or the prizes that were once considered immense.

Further, a national lottery can be an unreliable source of revenue to the government, as lottery revenues tend to fluctuate over time due to changes in the popularity of specific lottery games. Lottery revenue is also highly correlated with the business cycle; ticket sales increase when the economy is booming and falter when the economic conditions worsen.

As gambling and participating in lotteries become increasingly more available and socially acceptable the number of problem and pathological gamblers also increase. Two ways pathological gamblers burden society is through lower job productivity and loss of employment. In its worst cases, debt and bankruptcy are two additional economic burdens. Studies have shown that on average, pathological gamblers have more than double the debt of non-gambling households.

Arguments for

A popular supporting view is that Bahamians already play other lotteries and buy "numbers". If they are going to gamble anyway, it should be controlled and taxed by the government rendering it beneficial to both the individual and to the economy. It is difficult to estimate exactly how many Bahamans play the lottery.

Conservative estimates state that about $100 million is spent every year by Bahamians playing the Florida Lottery alone. Government cannot impose taxes on these funds used in Florida lotteries and illegal gambling houses. At these current levels, by introducing a national lottery with a 15% tax rate, the Government could raise approximately $15 million a year for public projects.

Lottery is a more popular source of revenue than imposing income taxes, as lottery participation is voluntary. Lotteries provide new sources of funding outside the scope of additional imposed taxation. It is no secret that many Bahamians are not eager to pay income taxes.

Contrary to the view that it will be mainly the lower income bracket citizens buying lottery tickets, advocates contend that most people spend only their "disposable entertainment" funds on gambling rather than "wasting their income away." The establishment of a lottery is not to produce a nation of gamblers. It would be unfair to prdvent a national lottery because of the possibility of it being abused.

Supporters also dismiss the argument that lotteries are so regressive, opponents to lotteries surmise that low-income households spend a larger percentage of their income on lotteries than families with more wealth, contending that low-income households spend proportionately more on every ticket purchased than wealthier households. However supporters note that the issue of regression relates more strongly to what the revenues from a lottery are spent on, rather than on the principle of a national lottery.

In our Caribbean region, most of the major countries including Barbados, Trinidad, Jamaica, and Guyana have national lotteries. The Barbados lotto was started in 1990. In its first year of operation, it made a profit of $5 million and paid out $25 million in winnings to local participants. The Jamaica Lottery Company has contributed approximately US$40 million to its Ministry of Health, Ministry of Education and other youth development foundations.

Conclusion

Should a nationally lottery be instated, it is of utmost importance that there be a non-partisan, non-political overseeing board to control and ensure that the funds are ear-marked and deployed as planned. It will be very important to determine who is playing, which organisations and individuals are gaining and which organisations and individuals are losing.

Whatever the outcome, one certainty about this long-standing controversial issue is that Bahamians will always hold different views on whether gambling should be legalised.

Nassau Guardian

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2 comments. Last comment 16 years ago by percygrinder.
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bahamas
Bahamas
Member #1447
April 30, 2003
667 Posts
Offline

bring it on

playing to win

    percygrinder's avatar - bob

    Bahamas
    Member #4787
    May 24, 2004
    1742 Posts
    Offline

    Shucks perry d