While we have officially opposed Prop 1C for a while now, we focused more on the bad public policy of borrowing for ongoing expenses.  But anti-gambling advocates point out something else about where this money comes from:

The Rev. James Butler, executive director of the California Coalition Against Gambling Expansion, said expanding gambling, even in the form of a lottery, will invite social and economic ills.

Asking people to bet more of their money could lead to increased bankruptcies, homelessness, crime and unemployment, he said.

“It’s built on the premise that Californians do not spend enough money on the lottery,” Butler said. “It is a mistake.” (SF Chronicle 5/7/2009)

Part of the problem with this argument lies with the fact that we already have Indian gaming across the state, where people can go and get a much more immediate gambling fix.  If people want to ruin their lives, there are plenty of ways to do it. That being said, it is somewhat distressing for California to stake its future on what is essentially a tax on hope, or if you are more cynical, a tax on the failure to understand the concept of expected value.

While Prop 1C looks more important with every day to the “package” that the Legislature approved in February, as it by far provides the most immediate cash, by no means it is a sure bet. If our lottery revenues do not increase, we’ll have to dig deeper into the general fund for education dollars going forward. And if they do increase, well, we’ve just increased the hope tax on players who are disproportionately poor.

UPDATE: The Riverside P-E has an article about who the lottery players are in the county.  Lottery officials point out that there is no hard data to indicate that lottery players are disproportionately poor, and the P-E’s investigation in the Inland Empire seems to tacitly agree with that statement. Still, the CA Lottery hasn’t allowed data to be released. But in Texas, the state ordered a demographic study. It showed that lottery spending was generally skewed poor and undereducated:

Players making under $12,000 a year spent three times as much as those pulling in over $100,000 and nearly double those making between $75,000 and $100,000. ($19 a month for the under $12,000 respondents, vs. $6 a month for those over $100,000; and $10 for those earning between $75,000 and $100,000.

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Here’s the education breakdown:

Less than high school diploma: 16 median dollars spent per month

High school degree 15 median dollars spent per month

Some college 16.5 median dollars spent per month

College dgree 8.50 median dollars spent per month

Graduate degree 6 median dollars spent per month (Houston Chronicle 12/12/2008)

UPDATE 2: I missed data from the CA Budget Project’s Report on 1C and a report out of UCLA that shows that California lottery players are both disproportionately poor and non-white.