Lottery: Expand with caution

By The Gazette Editorial Board

The state has cashed in on lottery revenues for the past 25 years, something that's certainly helped ease budget pressures.

The money has helped fund several important, even necessary programs. All told, Iowa has seen a $1.2 billion infusion of lottery funds, nearly $61 million last year alone.

But state leaders must be careful going forward about how they allow the promotion and expansion of the Iowa Lottery. That's especially true as new electronic gaming options emerge.

And while lottery revenues have been a generally welcome and relatively stable source of state funding, relying heavily on gaming to pay for state business always will be a gamble.

When the Iowa Lottery was introduced in 1985, profits were directed to discretionary programs - first to longer-term economic development, then to environmental and cultural programs.

But it didn't take long for the state to come to rely on the extra money: In 1992, the majority of lottery profits were shifted into the state general fund. Today, revenues help support state education, economic development and environmental programs, veterans services and other services.

Yet even with lottery income and some recent government streamlining the state still faces major budget shortfalls.

Lottery critics also point to statistics that show lower-educated, lower-income Iowans are more frequent gaming players, raising concerns that a disproportionate share of that revenue comes from those who can least afford it.

And then there's the estimated 1 percent of adult Iowans who are pathological gamblers. That number is in keeping with world prevalence rates, but it's vital that sufficient funding continue to be diverted to help those whose gambling habit has gone from diversion to addiction.

The Iowa Gambling Treatment Fund received 0.5 percent of gross lottery revenues up to $6 million, helping an average of about 1,000 clients each year from fiscal year 2001 through 2008.

It's a worthwhile investment, but is the current amount adequate?

We also think it's wise to think forward to how emerging electronic forms of gaming might exacerbate gambling addictions. Iowa Lottery President/CEO Terry Rich recently told a Gazette reporter that electronically delivered games and lottery games delivered to smart phones might be available soon. Will the ease and accessibility of electronic games result in even more gambling addiction among players? Or lead to other abuses and fraud? And no more TouchPlay debacles, please.

Those options must be carefully reviewed. If legislators are asked to expand the Iowa Lottery - as seems likely - they must keep in mind the potential social costs of expanding the program. They must be not be blinded by the chance of hitting the revenue jackpot.