What's all the hullabaloo about? Supporters of Referendum E, the multistate lottery game issue on the ballot, claim the new game is needed to provide more money for open space purchases, and to give any surplus funds to a public school fund. It's all voluntary, so have some fun.
What they don't mention is that conservation issues are now getting lots more money than they did before, that lottery revenues are higher than last year, and there are already lottery surplus funds spilling into the state's general fund.
When Gov. Bill Owens took office, one of the first things he did was indicate his dislike of the hard advertising sell by the lottery to entice more players, such as a man dressed in a chicken outfit sitting on the shoulders of another male and hitting him with a stick to the tune of "stranger things have happened than you winning the lottery."
The lottery commission was made aware of the governor's displeasure and decided that lottery advertisement beginning July 1, 1999, would focus on lottery money helping to beautify the state. Cries of alarm went up from some of the lottery hucksters who feared a major drop in gross revenues. But data now released by the Lottery Commission shows a slight increase in gross revenues for the fiscal year ending June 30, 2000, $370.1 million compared to 368.4 million the year before.
As for money going for conservation programs, the amount went from $73.6 million in 1999 to $89.5 million in 2000. The reason why more money wasn't going to those programs earlier was because the state was still paying for prisons that had been built using lottery funds. State parks, the Conservation Trust Fund, and Great Outdoors Colorado (GOCO) all received more money in 2000 than in 1999.
The biggest beneficiary was GOCO, which went from $31.2 million to $43.5 million and under the constitutional limits, $43.5 million was the most that GOCO could receive, so $1.3 million spilled into the state's general fund.
Can there be more money provided for "good causes" without joining with Powerball or other multistate games? Sure. The lottery commission under Gov. Owens has shown an ability to cut overhead costs, from $60.9 million for fiscal 1999 to $56.4 million in fiscal 2000.
Can more fat be cut out of the lottery overhead? Absolutely. When the lottery first began sales in 1983, the state wanted to pay no more than five cents of every lottery dollar to retailers licensed to sell the tickets. The big companies balked and got their way, six cents of every dollar.
In 1999, lottery ticket sellers were getting $7.50 for every $100 in lottery sales. In 2000, that was reduced to $6.60 cents. Take it down to six cents per lottery ticket and you free up another $2.2 million for open space without any increase in gross revenues.
Part of the money received by retailers are "bonuses" for having sold big winning tickets. Why do that? They get free publicity for having sold a big ticket, so others flock to their business on the assumption that it's a lucky store.
Who needs whom? There are lots of store that don't sell lottery tickets because the number of licensees are limited by the commission. Open this state monopoly process to competitive bidding and there will be millions of dollars more for GOCO and the other recipients.
Referendum E supporters never mention the hidden costs to taxpayers having to pick up after 61,000-plus resident pathological and compulsive gamblers play the state lottery. Their rates of crime, bankruptcy, spousal and child abuse, suicide, and unemployment plus other addictions are very, very high. Whatever money the "fun" games provide the state, is eaten into by tax money we have to pay out for the consequences of compulsive gambling.
States offering multistate games have seen their sales level off after a period of time, just as sales in Colorado over the past four years have averaged $368 million. So after multistate games, what's next?
Jerry Kopel, Denver Democrat, served 22 years in the Colorado House of Representatives.
Copyright 2015 Jerry Kopel & David Kopel