Editors Note: This is the first of a two-part series about lotteries. Part one details lottery systems. Part two will examine the pros and cons of lotteries.
With Gov. Brad Henry saying he wants the lottery on a ballot sometime this summer, the odds of Oklahoma gaining a new form of state-sanctioned gambling are higher now than they were six months ago and the great debate is on.
Oklahoma could soon be deciding whether or not they want a lottery, what kind of lottery and if that is their choice what the state should do with the proceeds.
"The job of a lottery is to provide money to fund a cause," said Mark Zamaripa, president of the North American Association of State and Provincial Lotteries (NASLP).
In Oklahoma, the cause appears to be education. Governor Henry has long touted a lottery dedicated to education.
"I'd like that because whenever I drive to Kansas and Missouri they get our money and we need to keep it here," said UCO student Stephanie Finley.
Thus far this fiscal year (FY), the state's education budget shortfall is almost $160 million and local media outlets broadcast dire reports nearly daily.
Tax collections have continuously come in beneath projections and the state Constitution mandates a balanced budget.
Opinion polls indicate that at present public support for an education lottery in Oklahoma is high, said Paul Lund, Gov. Henry's communications director. Education and the budget crisis are the governor's top priorities, he said. Oklahomans want to restore education revenue, pay teachers more and produce more college graduates.
But how? A one-cent sales tax? A lottery
What is the truth about lotteries? Are they immoral, a corrupting influence on society? Or, when economic times are tough, are they the final answer to fiscal woes?
"The truth probably lies somewhere in between," Zamaripa said.
Lottery Mania
Lotteries are big business. Since the first modern-day lottery was created in 1964, they have raised about $200 billion nationwide for government programs, according to NASPL statistics.
In FY 2001, U.S. lottery sales totaled $38.9 billion. Colorado's lottery averages more than $1 million in sales per day. And since it began in 1985, the Oregon lottery has grossed more than $10 billion.
During the fall gubernatorial campaign, both Henry and Independent candidate Gary Richardson supported implementing a state-run lottery. Henry said he likes the way Georgia spends its lottery money on education scholarships. Richardson touted Oregon's model.
Oklahoma's would likely by a hybrid, not modeled after just one particular state, Lund said.
In 1964, New Hampshire was the first state to get a lottery. Soon, more than 40 will have them. As Zamaripa said, lotteries fund causes. Besides education they include the environment, healthcare, senior citizens, sports facilities and capital construction projects. Which programs benefit depends on a state's financial needs, Zamaripa said.
Oregon's Lottery
In the early '80s, Oregon was struggling through an economic recession and public support for a lottery was high, said Lou Torres, an Oregon lottery spokesman. About 66 percent of Oregonians voted for it, he said.
Then in 1998, Oregon voters approved a Constitutional amendment that allowed lottery money to go to natural resource programs. Some of the money went to help salmon, which had be been declining in numbers, Torres said.
In 1995, an amendment was approved for public education and in 1984 the cause was economic development.
Every two years, the Oregon Legislature and governor must decide how to distribute the lottery money, Torres said.
During the current biennium (2001-2003), public education is receiving two-thirds of lottery profits, nearly $430 million. That money goes to Oregon's State School Fund and is then distributed the same way as other moneys in that fund.
"Since 1984, the Oregon lottery has raised $3.3 billion [for government programs] and paid out $7.5 billion in prizes," Torres said.
Lottery HOPE
Georgia lottery money goes toward college scholarships, a pre-K program and capital outlay and technology for primary and secondary schools.
Since 1993, Georgia's HOPE scholarship program has awarded $1.5 billion to more than 600,000 recipients. Some recipients qualify in high school. Otherwise, to qualify Georgia residents must be at least a college sophomore and have a minimum 3.0 grade point average.
For students at Georgia's public universities, a HOPE scholarship pays full tuition, approved mandatory fees and a $150 book allowance. Students at private universities receive $3,000 per academic year and they must also enroll in a minimum of 12 credit hours.
During Oklahoma's gubernatorial campaign, Henry's plan projected a lottery would bring in $300 million annually. Half of the money raised would be earmarked for college scholarships. The other half would go toward public schools. No more specifics are yet available.
"Some states have had success with [a lottery] when they used it for things that are 'icing on the cake,'" Carolyn Crowder, president of the Oklahoma Education Association told The Vista.
"We'd have to be sure of what we wanted to use the lottery money for. That's why we need this time to get that clear."
Lottery Structure
If Oklahoma gets the lottery, the Legislature would take steps to establish the organizational framework. Lund said it's too soon to set a timetable.
In one scenario, the Legislature might pass a resolution authorizing a special election and then Gov. Henry would set the date for the election, said Mike Clingman, secretary of the Oklahoma State Election Board. The people would then vote on a referendum to enact a lottery by statute, he said.
"The vote in and of itself doesn't create a lottery," Zamaripa said.
"It authorizes it. During the legislative process, there will be a lot of decisions made about the organizational structure."
The earliest date for a vote on a lottery-related Constitutional amendment authorized by the people would be the next general election, in the fall of 2004. Enabling legislation would establish ground rules for setting up the lottery. A lottery commission would take it from there.
Oklahoma's lottery would be like a state agency. Lottery organizational structures vary from state to state. Zamaripa said the Colorado lottery, which he directs, had its 20th anniversary in January, is run by a staff of 128. Some states have a lottery commission, which deals with policy issues. Beneath the commission is a lottery director.
The director oversees day-to-day operations and obviously is responsible for raising revenue, Zamaripa said.
"Your job as lottery director is a constant surprise," he said.
In an emerging business model, a lottery is a public-private corporation, not a state agency, in which employees are not paid by the state, Zamaripa said. With this model, the lottery commission is like a board of directors and the director like a company president.
Zamaripa said lotteries usually have four divisions: marketing, which includes sales and advertising, security, which includes internal investigations, an administrative division and lastly, information technology, responsible for areas such as website development and maintenance.
Coloradans choose from six lottery games: Scratch (1983), Lotto (1989), Keno (1991), Cash (1996), Perfecto Games (1998) and Powerball (2001).
Some 3,000 Colorado retailers sell lottery tickets, Zamaripa said. They usually must pay a license fee and other costs. Retail outlets in convenience stores, gas stations and supermarkets receive commission -- on average nationally five to eight cents -- for each ticket sold.
Colorado's biggest lottery payout thus far has been $27 million, Zamaripa said.
"That's one of the best parts of our job, informing the winners, and getting to know the people that win," Zamaripa said.
Large payouts are usually made over a pre-determined schedule. The national record of $314.9 million was paid out by a 23-state lottery, claimed in December by a West Virginia building contractor.
"I just want to thank God for letting me pick the right numbers, or letting the machines pick the right numbers," Andrew "Jack" Whittaker told the Associated Press.
Rather than receive the entire $315 million spread out over 30 years, Whittaker chose the after-tax one lump sum payment of $170 million. The retailer who sold the winning ticket received a nice Christmas bonus of $100,000 from the lottery company.
Lottery winners do not have an option when it comes to anonymity; their names and hometowns, but no phone numbers or addresses, are posted. As a state agency, accountability is an issue, Torres said. When players purchase a ticket, they agree to specified conditions.
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