DALLAS - Texas lawmakers, dependent on declining lottery revenues to help cover school costs, are looking for ways to milk more money from the state-sponsored gaming program as Texans worry about losing their jobs.
Two state Senate committees this month discussed ways to increase the state's share of gaming revenues, including the possible sale of the state lottery, a move that Gov. Rick Perry proposed last year. Perry estimated that a sale would raise $14 billion.
The state's share of lottery revenues this year has dropped about 3% to $975 million after several years of $1 billion or more. Overall sales hit a peak of $3.799 billion in 2006 and have been falling since. The lows of $2.9 billion came in 2002 and 2004.
Lottery officials say the loss of sales outlets on the Gulf Coast after Hurricane Ike have hurt sales as much as the declining economy. Similarly, Iowa blamed damage from widespread floods for declining sales, though sales in most states are down this year.
As a de facto tax on the poor that make up the majority of participants, lottery revenues are susceptible to economic declines, according to industry experts. Lottery players who might have risked $20 on a single ticket last year are buying smaller tickets or playing scratch-off games this year.
Sen. Jane Nelson, R-Lewisville, an opponent of legalized gambling, said in recent hearings that she wanted to find ways to get more revenue for the state without expanding the lottery.
Sen. Kip Averitt, R-Waco, said the state first should determine the value of its lottery before it looks at potential solutions to boost returns to the state.
Perry's plan would have reserved $8.3 billion from a sale for public education and $3 billion for cancer research. However, lawmakers in 2007 authorized $3 billion of bonds for the cancer research program without involving the lottery. Lawmakers are expected to provide funding for the cancer program in the 2009 session beginning next month after voters approved the bonds in 2007.
Perry's plan also set aside $2.7 billion from a lottery sale that would be used with federal money in a new health insurance program covering as many as 600,000 currently uninsured Texas adults.
Yearly return from investment of the lottery proceeds was expected to return $1.3 billion annually in 2007, about $300 million more than Texas received from owning the lottery, according to Perry's staff. But that was before the market crashed this year. Texas investments have suffered deep losses.
Eugene Christiansen of Christiansen Capital Advisors, a consultant to commercial gambling and entertainment industries, said the days of "easy money" from the lottery are over and that Texas would have to work harder to keep revenues coming in at the previous rate.
Economist Mark Thornton, resident scholar at the libertarian Ludwig von Mises Institute in Alabama, has called lottery taxes "highly regressive" and said studies have repeatedly shown that poor people are the most frequent players. Lottery taxes take a higher share of the poor person's income than they do from the higher-income players, most of whom can find better odds elsewhere.