NCPA - National Center for Policy Analysis


March 16, 2009

Gov. John Corzine wants to allow the 30-state Powerball lottery, potentially making New Jersey the first place where gamblers could buy tickets for the two consortium lotteries -- the kind whose single jackpots often top $200 million, and have flirted with $400 million.  The payout for New Jersey could be tremendous: $40 million during the next fiscal year. 

But despite the games' appeal -- a chance at fabulous riches, a bulwark amid a global financial crisis -- New Jerseyans might resist parting with another buck a week, says

  • State unemployment reached 7.3 percent in January, a 15-year high.
  • The very fiscal 2010 budget that pitches Powerball also eliminates homestead rebates for all but the neediest, and holds some chance of local property-tax increases, due to a drop in state aid to towns and schools.
  • The spending plan also underwrites programs created just months ago to stave off foreclosure.
  • More directly, New Jersey lottery ticket sales overall were down about 1 percent during the first half of the fiscal year, which started July 1.

But greater ticket sales may lead to a new set of problems, says

  • Even as lottery revenue declined last year, overall calls to the state's 800-GAMBLER counseling line jumped by 30 percent, growing from 15,223 inquiries in 2007 to 19,801 last year.
  • Also on the rise were calls from people specifically concerned about the lottery — 14 percent of all calls to the hotline, a 2 percent rise from the year before, and 5 percent more than in 2003.
  • Historically, about half the hot line's calls involve casino gaming; but that percentage — 54 percent in 2008 -- has fluctuated over the years, unlike the steady growth in lottery calls.

Finally, there is the question on whether people who play can afford to do so.  Lottery critics argue that ticket sales amount to a regressive tax, that is, a higher proportion comes from the poor than from the wealthy.  A 2007 study by the non-profit, nonpartisan National Center for Policy Analysis cited studies showing that the country's lowest earners spend twice as much on the lottery as those earning more than $100,000 a year.

Source: Elise Young, "Gambling to ease debt, Corzine pitches Powerball,", March 15, 2009.


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