Republicans, poised to create the state’s first lottery, long considered the games bad for the poor

Published 12:03 pm Monday, August 27, 2018

By Mississippi Today

JACKSON  — Gov. Phil Bryant stood under the Capitol dome in January of 2016 and fielded a broad set of questions from reporters.

One reporter, citing a comment made by a state senator, asked the governor if he would support a state lottery.

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“It’s a silly notion,” Bryant said. A few seconds later, he doubled down: “I am not for it.”

Two-and-a-half years and 500 closed bridges later, Bryant threw his support behind the lottery under the same Capitol dome as he kicked off a special legislative session to address infrastructure funding.

“The state lottery is not my favorite source of revenue, but decisions have to be made,” Bryant said just before the special session began last week. “You have to weigh what you would like and what needs to be done. We need funding for infrastructure in Mississippi, and this is a large opportunity to capture that revenue.”

Bryant’s office drafted the bill, according to several lawmakers and leadership staff, and he remains the state leader pushing hardest for the lottery proposal. Polls show that Mississippians overwhelmingly support implementing a lottery, which helps explains why Speaker Philip Gunn, R-Clinton, and Lt. Gov. Tate Reeves are not standing in Bryant’s way.

Reeves’ staffers approached several state senators Thursday evening and whipped votes to support the lottery, several Republican senators told Mississippi Today. Before the special session began last week, Gunn told the Associated Press he wouldn’t block a lottery from passing “if the votes are there” among Republicans.

For both legislative leaders, however, this represents a change in position. Gunn and Reeves worked to block the lottery’s passage the past two sessions, citing a lottery’s negative socioeconomic effects.

“(The government) is purposefully planting an unachievable dream – a pipe dream of striking it rich – in the minds of its citizens,” Gunn said in a radio interview in April 2017. “It is purposefully not telling its citizens about the outrageous odds of winning. It is enticing people to play while at the same time working to decrease their chances of winning, all because the government wants more money to spend. All for the purpose of making the government richer so it can spend more. You have the government preying on its own people simply for the sake of making more money and not being truthful with them about their chances of winning.”

Reeves said at a campaign event in October 2017 that he opposed a lottery and believed the game would not generate significant revenue.

“I believe that the notion that significant new dollars will come into the state are not accurate,” Reeves said at the time. “I think the net revenue is going to be significantly less than some people would have you believe it is.”

Studies supporting both claims abound, including some cited during a Gunn-commissioned study group last summer.

For example, a 1999 study published in the National Tax Journal found poor people disproportionately spend more money on lottery than others, while a 2012 National Institutes of Health study determined lotteries attract more buyers in times of high unemployment or recession.

A study conducted by state economists at the University Research Center cites other studies that show similar outcomes.

“More revenue is transferred to the government from lower income participants than higher income participants,” the 2017 study concludes. “Economic researchers have found greater income inequality in states with lotteries than states without lotteries, a reflection of the outcomes described above. At least one study cites the proliferation of state lotteries in the rise in income inequality in the U.S. which began in the 1970s.”

Gunn and Reeves fully understand these concepts, discussing them on numerous occasions in the past and citing them while blocking efforts to pass a lottery through the Legislature.

“Eighty percent of all lottery tickets are bought by, disproportionately, low income, minority men who have less than a college education,” Gunn said. “Another study I saw said that 80 percent of people who participate in the lottery are at or below poverty level. Clearly these are the ones who can least afford it,” Gunn said, citing statistics from a 2010 article no longer available online. Several Christian blogs urging Christians to avoid playing the lottery cite the statistic as well.

Gunn added: “Where does the government sell lottery tickets? They’re not selling them at the Jackson Country Club. They’re not selling them at the lobby of the banks. They sell them at the place where the poor are most likely to frequent because it is overwhelmingly supported by the poor.”

“I think many of the people who are going to play the lottery are not people whose discretionary income is significantly greater than what they’re currently spending their money on,” Reeves said in October 2017. “You’re going to see they’ll shift from buying Cokes or candy bars or buying gas to buying lottery tickets.”

Economic experts who have regularly advised Mississippi’s Republican leadership are also against implementing the lottery.

Analysts at the Washington-based Tax Foundation, which helped Reeves and Gunn navigate their 2016 largest tax cut in state history, spoke bluntly about the state’s consideration of the bill.

“As Mississippi policymakers contemplate a lottery, it may be tempting to think of it as free money—new revenue raised without having to adopt a new tax,” Jared Walczak, a senior analyst at the Tax Foundation, wrote in January. “A better way of thinking about the issue, however, would recognize the lottery for what it is: a regressive form of high implicit taxation.”