By Don MacGillivray

 

The Oregon Lottery was created through an initiative petition amending the Oregon Constitution in the midst of the 1984 recession to support economic development and job creation.

Since its inception, the Lottery has paid out over $20 billion in prizes and transferred over $7 billion to support public education, economic development, state parks and watershed enhancement.

Its operations are designed to fulfill its duty to develop, produce and market lottery games, pay the winners, pay operating expenses, and remit the remaining net profits to the State. The Lottery strives to promote responsible gambling and provides public information about the lottery and also funds treatment programs for compulsive gamblers.

The Lottery issued its first Scratch-it games in 1985. Other games were added in 1989 and 1992. Current game mix includes: Megabucks, Keno, Powerball, Mega Millions, Pick 4, Win For Life, Lucky Lines and Raffle.

They also offer Video Lottery games including both poker and line games that provide 70 percent of the lottery’s income.

Self financed entirely through sales, at least 50 percent of the revenue must be returned to winners as prizes while administrative expenses are under 4 percent.

From 1985 to 1995, lottery proceeds went to economic development and job creation. In 1995, Oregon voters directed a 18 percent of its annual proceeds to be used to finance public education. In 1998, voters passed a constitutional amendment requiring 15 percent of proceeds to be used for natural resources, with half going to state parks and half going to watershed conservation.

Overall the lottery is 1.8% of the state budget and it earned slightly over $1 billion in 2009-2011. Players comprise 63% of the total adult population and the typical player is similar to the demographic profile of the state.

With approximately 3,800 retailers and 25% (947) of the retailers located in Multnomah County, the full story of the Oregon Lottery is available on their website at: www.oregonlottery.com

Throughout history, governments have been torn between a desire to tap gambling’s enormous potential as a source of revenue and the fear of its associated social ills. Nevertheless, the combination of an ever-increasing need for state funding and the resistance to new taxes increases the pressure for the growth of lotteries.

The concept is ancient. Various games of chance existed among ancient Egyptians, Chinese, Greeks, and the early Germanic Tribes. In medieval Europe, lotteries were available extensively through private organizations and were eventually adopted by governments.

Two hundred years ago, government sanctioned lotteries were common throughout America. Lacking a strong central government and burdened with a weak tax base, early Americans viewed lotteries as legitimate vehicles for raising revenue.

Proceeds were a general way of funding public needs and specific improvements like the construction of roads, hospitals, jails, canals, churches and industries. The colleges of Harvard, Yale, Columbia, Princeton, and many other institutions were supported with lottery funding. Much later, several brokerage houses moved into stocks and currency exchanges, ultimately evolving into banking enterprises, some of which are prominent today.

As the country’s dependency on lotteries increased so did the opportunities for abuse. Serious opposition began to mount in the early 1800s as part of general social reform that included movements for temperance, woman’s rights, and the abolition of slavery.

The Puritans and Quakers were against the use of lotteries for various moral reasons. Lottery fraud became a concern, and social problems stemming from excessive gambling developed.

When Americans closely examined lotteries, their perception changed to the belief that they actually imposed a highly regressive levy. Criticized for being fraudulently conducted, in New York several lottery operators had pocketed the proceeds without awarding any prizes.

It was believed by many that state-sponsored lotteries inevitably increase crime. Encouragement of gambling by the state undermined its fundamental obligation of protecting society from criminal activity. By 1860, most states had enacted prohibitions against lotteries.

Federal legislation brought an end to the last remaining legal American lottery. From the late 1800s until 1964, lotteries were prohibited throughout America. These prohibitions were based on a perception that they greatly contributed to personal downfall and societal decay, as well as concerns about their fraudulent operation.

Persons in lower income groups have the greatest incentive to play the lottery because lotteries promise of quick riches. Newspaper reports suggested that most lottery players were poor or lower income persons. A society that is truly interested in breaking the cycle of poverty would be expected to promote the traditional virtues of education, hard work, thrift and savings.

Lotteries have been successful in accomplishing their primary goal of raising revenue in 43 states and are likely to remain part of the governmental functions for years to come.

Modern lotteries have essentially eliminated the risk of fraud and the general public believes that lotteries do good things.

 

“There is not a more certain proposition in mathematics, than the more tickets you adventure upon, the more likely you are a loser.”  – from The Wealth of Nations by Adam Smith, 1776 p. 94