Stand-Alone Type of Electronic Devices for Convenient Gambling

Although earmarking might be an excellent device for engendering political support for a lottery, there is reason to doubt if earmarked lottery revenues in fact have the effect of increasing funds available for the specified purpose. When expenditures on the earmarked purpose far exceed the revenues available from the lottery, as is the case with the general education budget, there is no practical way of preventing a legislature from allocating general revenues away from earmarked uses, thus blunting the purpose of the earmarking.11 Although lotteries often are seen as a principal source of state revenue, actual contributions to state budgets are exceedingly modest. In 1997 total own-source general revenues from the 38 lotteries ranged between .41 percent in New Mexico to 4.07 percent in Georgia.12 By contrast, state general-sales taxes and income taxes each averaged one-quarter of all own-source general revenue collected by states.13
Another important issue regarding lotteries is the ability of government at any level to manage an activity from which it profits. In an anti-tax era, many state governments have become dependent on “painless” lottery revenues, and pressures are always there to increase them. The evolution of state lotteries is a classic case of public policy being made piecemeal and incrementally, with little or no general overview. Authority is divided between the legislative and executive branches, with the result that the general public welfare is taken into consideration only intermittently. Policy decisions taken in the establishment of a lottery are soon overcome by the ongoing evolution of the industry. It is often the case that public officials inherit policies and a dependency on revenues that they can do little or nothing about.

The terms “convenience gaming” and “retail gaming” have been used to describe legal, standalone slot machines, video poker, video keno, and other EGD’s that have proliferated in bars, truck stops, convenience stores, and a variety of other locations across several states. However, these terms do not adequately convey the range of locations at which EGD gambling takes place, nor do they describe the spectrum of laws and regulations that apply (or fail to apply) to EGD’s. Some states, including Louisiana, Montana, and South Carolina, permit private sector businesses to operate EGD’s; in other states, such as Oregon and California, this form of gambling is operated by the state lottery. In Nevada, slot machines can be found in many public locations, including airports and supermarkets. Montana was the first state after Nevada to legalize stand-alone EGD’s, specifically video poker in bars.14 In California, video keno operated by the state lottery can be found in most traditional lottery outlets and in many other locations as well. The following table shows the number of EGD’s reported in several of the states in which this form of gambling is legal.