Are State Run Lotteries a Good Bet?

Lottery expert Rob Kohler, who worked for the Texas State Lottery for 12 years, recently joined Greg Davis on Priority Talk Radio to provide data and answer economic questions related to state lotteries. Their meeting was made possible by Eagle Forum of Alabama’s one-day policy conference, which brought state and local leaders, along with topic experts, together to discuss legislative priorities ahead of Alabama’s 2025 Legislative Session.

The emphasis of their discussion was economical (as opposed to moral), although they both mentioned that the two cannot be completely disentangled. Are lotteries a good bet economically for their states?

Greg Davis begins by questioning the connection between lotteries and education. One common argument for gambling is something along the lines of “a lot of the gambled money will go to schools, scholarships, and education programs.” Does this actually happen in such an efficient manner to make gambling worthwhile?

Rob Kohler responded, “The short answer is no.”

He mentioned that was the strategy that helped to bring the lottery to Texas in the 1990s. With gambling, the education funding issue would be supposedly solved. However, moving to 2025, the number one issue in the Texas legislature currently is education funding. This pro-gambling argument is wrong.

They then continued with discussing the addictive nature of the lottery, particularly the scratch-off tickets a person can buy at a convenience store. There is instant gratification through the rush of buying the ticket and seeing if anything has been won. This rush leads to addiction, which is why 70+% of state lottery sales are through scratch-offs.

Rob Kohler emphasized that poorer regions of a state tend to spend more money on the lottery than richer areas, which is why gambling has been called a “tax on the poor.” Those who can least afford to gamble are the ones who gamble the most. He said that Texas is evidence of this: The number one legislative district for lottery sales, an area in San Antonia, had a per capita income of $26,000 a year. Yet it contributed 102.9 million dollars in lottery sales. This is contrasted with the richest per capita legislative district, an area in Dallas, with a $104,000 income average per year. Its lottery sales? 24 million dollars. The poorer districts gambled more heavily than the richer districts, across the board.

Greg Davis and Rob Kohler proceeded to cover other pro-gambling arguments, from “letting the voters decide” to “money is leaving our state and going to adjacent states.” To hear the rest of their informative conversation, click here.