“The story of the Tennessee’s Lottery is the story of much of my life,” writes Sen. Steve Cohen in a Tennessean column this week, marking the 10th anniversary of the state’s monopoly on legalized gambling. While acknowledging the program’s imperfection, Sen. Cohen takes (and probably deserves) responsibility for legislation leading to the lottery referendum passed in 2002.
The Tennessee Lottery has existed for 10 years; it joined Mega Millions in 2010.
The lottery is ostensibly designed to fund college scholarships, but it’s the state’s university system that really hits the jackpot—with the lottery serving as its public casino and a hidden regressive tax on the poor. Sen. Cohen’s narrative of the Tennessee Lottery ignores statistics that illustrates how bad a bet the lottery is for many of his constituents.
According to the Tennessee Lottery website, over $11.1 Billion has been gambled on lottery tickets, netting the government more than $2.89 Billion (nearly a 30% profit). A windfall to the state’s university system, much of this money has passed from households with lower incomes and education levels to benefit middle class families. This article cites a 2010 study that households with take-home incomes of less than $13,000 spent about nine percent of their income on lottery tickets, and non-college graduates spent more than three times more on the lottery than graduates.
When that money comes back around, however, it’s seldom to the benefit of the low-income players: over half of the scholarship money paid out in 2009 went to students from households whose adjusted annual income exceeded $72,000—with 34% (a plurality) of those funds going to students from $96,000+ household incomes, according to a 2011 Special Report by the Tennessee Education Lottery Scholarship Program.
Meanwhile, the University of Tennessee estimates that it currently cost over $25,000 per year to attend college as undergraduate, and the Memphis city school system remains near the bottom in the country by almost any measure. (While some other state lotteries allocate a portion of funds toward public K-12 schools, Tennessee puts all its chips in college scholarships.)
It (almost) goes without saying that all persons should have an equal right to blow their money through legal gambling, whether in the stock market, betting on the Super Bowl or racking up massive college debt in hopes that a degree will advance one’s station in life. Maybe politicians like Sen. Cohen and other members of the General Assembly should “celebrate” an institution like the Tennessee Lottery by considering real education reform.
