The first lotteries were a popular source of revenue for states. In New York, lottery sales topped a million dollars and Massachusetts reported the highest percentage return on a lottery of any state. In Boston, lottery profits financed projects such as a battery of guns for the city and the construction of Faneuil Hall. But in North Carolina, a lottery referendum was stopped by the House of Representatives. Why? It’s all in the history of the lottery.
New York has the largest cumulative sales of any lottery
Many people ask, “Why does New York have the largest cumulative sales of any lottery?” The answer is simple: higher-income people play the lottery more often than those with lower incomes. That may sound counter-intuitive, but the fact is that most states with higher lottery sales also have higher median household incomes. The results don’t bear out the myth that people buy lottery tickets randomly; they often buy them while traveling.
The lottery in New York was introduced in 1967, and the first year it was very successful. The lottery earned $53.6 million in sales, enticed residents from neighboring states to purchase tickets. By the end of the decade, twelve other states established their own lotteries, and the lottery became firmly entrenched in the Northeast. It helped fund public works and was popular with the Catholic population, which was generally tolerant of gambling activities.
Massachusetts has the highest percentage return to any state government from a lottery
Despite the widespread criticism of lottery fraud, the Massachusetts State Lottery is one of the most profitable in the country. Profits from the lottery flow directly to state and local governments, supplementing the budgets of low-income communities. The Massachusetts Lottery must be profitable in order to remain a sustainable source of revenue, and its financial future is under threat from shifts in prize payouts and online gaming.
One criticism of state-run lotteries is that the money they generate are not used for local education, health care, or other public services. As a result, lawmakers often use lottery earnings to replace other funds from state general revenues. Critics say this unfairly burdens the poor by raising money that is not needed for education. A Cornell study analyzed ten years of data from 39 states and found a strong correlation between lottery sales and poverty rates.
North Carolina House of Representatives voted to prevent a statewide lottery referendum from appearing on the ballot
After years of debate, North Carolina’s House of Representatives narrowly approved a referendum that would have placed a statewide lottery on the ballot. However, the debate has largely been along party lines. Democratic lawmakers are embracing the lottery initiative in hopes of boosting voter turnout in November, when they need to win control of the House and Senate.
During the 1996-2020 legislative session, voters approved 90.9 percent of statewide ballot initiatives, while only a small number were defeated. This means that a statewide lottery referendum in North Carolina will not be approved by the voters. While there are some issues lingering on the state’s ballot, the North Carolina House of Representatives’ action is a step in the right direction.