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Video Gambling Risky Way To Pay

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By H. ROY KAPLAN

The Tampa Tribune

Published: October 4, 2008

As the economy has weakened and citizens have become weary of increased taxes, more pressure is being put on state governments to find "painless" alternatives to fund education, which accounts for the largest category of state expenditures.

The bulk of funds for education comes from local and state sources - property taxes, bonds, special tax appropriations and, since the latter part of the 20th century, gambling .

While Florida spends $22 billion, or about a third of its budget, on education, it ranks 38th among the states in per pupil expenditures and is 49th in the number of students who graduate from high school in four years.

Faced with a $3 billion loss of tax revenues, including a $100 million loss of revenue from the state lottery, state officials recently tapped the state's "rainy day" reserve fund for $672 million. Now there is growing sentiment - including a coalition called Florida's People, Florida's Promise, made up of community organizations that serve children and seniors - to legalize more gambling, including video lottery terminals.

All but two states have some form of legalized gambling (Utah and Hawaii are the exceptions). And while gross revenue from the diverse forms of state run or regulated gambling was $90.93 billion in 2006, this was only a fraction of the cost of states' operating funds compared to money generated from taxes. For example, lotteries grossed $24.63 billion for the 41 states in which they existed in 2006, but by law they must return half of their revenue in prizes and another 10-15 percent goes for advertising, administration, and vendors.

Florida's lottery is one of the most successful in the nation. It raised over $4 billion in 2007. In 2006-07 the lottery contributed $1.26 billion dollars to the State's Educational Enhancement Trust Fund, with $747 million going to the 67 school districts. That is only 2.9 percent of their budget, hardly the financial savior of education it was touted as being. And while lottery and other gambling revenues have become an integral part of state finances over the last three decades, their contributions to state coffers (with the exception of Nevada) pale in comparison to revenue generated through more traditional and progressive methods like an income tax.

Depending on gambling revenues to solve fiscal problems is not only naïve but pernicious. Research consistently reveals that gambling is one of the most regressive forms of revenue generation, falling disproportionately on those people who can least afford it.

Further, 1 to 2 percent of the adult population and 5 to 7 percent of adolescents and college students have gambling-related problems. Advocating for children while supporting video lottery terminals is not only irrational but hypocritical.

We don't need to fund education and social programs on the backs of children and the poor. We need a comprehensive approach to revenue generation that is fiscally responsible and equitable.

H. Roy Kaplan is a research associate professor in the Department of Africana Studies at USF. He served on former New York Gov. Hugh Carey's Casino Gambling

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