November 8, 1978

The Lottery Revisited

As predicted, the Ohio State Lottery has been hit with corruption - though a lot sooner than even the critics thought likely.

Lottery Director David Harbarger resigned a couple of weeks ago amid allegations of kickback payments from fast-buck operators (literally) who make fortunes thinking up gimmicks to sell more tickets.

A new "game" to hit the streets Nov.  14 - called Three-Card Match - triggered the latest scandal.

MCA Games, Inc., and Scientific Games Inc., were competing for a $2.5 million contract from the Lottery Commission.  The old method of conning suckers had worn out - not enough people were buying chances.

MCA won the contract, but Scientific charged payoffs had been made to influential politicians to grease the skids.  The charge will have to be proven, of course, but this is the third or fourth time improprieties have been alleged.

Many people are starting to believe the old adage, "Where there's smoke, there's fire."

To clean up the mess, Governor James Rhodes appointed Richard L. Krabach as temporary lottery executive.  Krabach took a look around and declared that the lottery was hardly worth the trouble and might be better abolished.

Just for fun, I dug out a column I wrote on the then-proposed state lottery back in April of 1972.  It is interesting to note that the lottery lives up to its advance billing:

"Most perplexing issue to deal with is that of a state-run lottery.  A majority yes vote would repeal a constitutional ban on lotteries dating back to 1859.  In those days lotteries were popular methods of building roads, but cheating and graft led to the restriction that has prevailed for more than a century.

"Rep. Ron Mottl, lottery sponsorer, says we COULD realize a take of three or four hundred million dollars in Ohio.  He also could fly to the moon on gossamer wings with the same kind of confidence.

"No state - I repeat, no state - has realized HALF of Mottl's fantastic estimate.

"More realistic proponents of the Ohio lottery contend that the measure would produce about $40 million a year net for public schools after prizes, commissions to sellers and administration.

"At present, six states have lotteries: New York, New Jersey, New Hampshire, Connecticut, Pennsylvania and Massachusetts.  The latter three have gotten underway just within the last three months, so accurate information about their income-producing merits is inconclusive.

"The most successful lottery is that of New Jersey which initiated the popular 50-cent ticket.  That state received $69 million last year for its public schools and expects to hit $80 million this year.

"New York, which started out with a $1 ticket and made about $120 million a year for schools, dropped to only $26 million profit last year.  Since introducing the 50-cent ticket this year, New York's lottery is running at a $50 million net profit clip.

"The New Hampshire lottery produced less than a million dollars during its first year but now is up to slightly more than $2 million annually.

"It is interesting that the first three lotteries dedicated their profit to public schools - as Ohio apparently plans to do.  The "take" was so meagre in proportion to need that the three lotteries inaugurated this spring ear marked prospective profit for other purposes - Connecticut for general expenses, Pennsylvania for defraying real estate taxes of senior citizens, and Massachusetts for local governments.

"A lottery is an irresponsible method of raising money for critical purposes.  It depends upon the desperation of poor people for support.  Experience with existing lotteries shows that the very people who can least afford to spend their money on long-shot chances - the Mafia gives better odds - are the ones who contribute the largest share to state lotteries.

"Lottery income, being dependent upon the poor, fluctuates widely.  It would be impossible to budget school needs against income determined by gambling instincts.

"A $40 million bonanza sounds great but it is a miniscule part of a $7.5 billion state budget.  A lottery is a frivolous method of financing a state.

"If Ohioans are stupid enough to adopt a state lottery it won't be many years before we scream for abolishment.  A half-dozen times throughout our history we have tried lotteries, yet, finally, the social evils at-tending them led to ever stricter attempts to stamp them out."

Now - six and half years later - I find it necessary to correct only one statement of that old column: the state budget is $9.5 billion today and the net lottery profit to the state is $44 million.  The percentage of "take" to state need, however, remains less than one percent.

And, of course, the lottery backers broke faith with the voters.  Once enacted, the lottery money was shunted past schools into the general fund where it was dissipated for lower priority projects.

We live, but we don't always learn.

Author: Lindsey Williams