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Nevada doesn't need to take a chance on a lottery

David Colborne
David Colborne
Opinion
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Call “Vax Nevada Days” whatever you want, but don’t call it a lottery.

Personally, I call it a less unreasonable use of tax dollars than most. When you’re talking about hospital bills, $5 million just doesn’t go very far, even when you’re the government and setting your own price through Medicare or Medicaid rates. If Nevada’s new state-run COVID-19 vaccine incentive program prevents a few dozen hospitalizations, we might make the federal government’s pandemic relief funds back — and, oh yes, maybe save a few lives, if that sort of thing is important to you. Best of all, speaking as someone who got vaccinated relatively early, by opening the rewards to every vaccinated Nevadan, it doesn’t punish those of us who took responsibility for our health, yet still gently encourages those who prefer to procrastinate to get on with it already. 

Yes, like all government programs, it has its issues. As fellow columnist Dayvid Figler points out, there’s no way to opt out, which is a problem if you have moral or religious objections to participating in the program, unless you’re incarcerated — in which case you’re excluded automatically. These, however, are relatively easy issues to solve. That said, the reason some people might object to being automatically enrolled in the program is because it immediately drew comparisons to the third rail of Nevada politics. 

No, not mining taxes. The other third rail. 

No, not the death penalty. The other third rail.

No, not gun control. The other, other third rail. 

No, not physician assisted suicide. The other, other, other third rail.

For a state which is almost anaphylactically allergic to rail-based mass transit, Nevada has a lot of third rails. This time, however, I’m talking about lotteries — yes, that’s right, government-owned and government-run competition of our gaming economy. Letting the government compete against the Wynn, the Sands, and whatever the Eldorado’s corporate parent is calling itself these days is so popular with our largest economic sector and its lobbyists, in fact, that it’s been constitutionally prohibited since 1990.

Luckily, Vax Nevada Days is not a lottery. The reason is simple — none of us bought tickets. Yes, a few lucky Nevadans will randomly get a prize, including the possibility to go fishing with the director of the Governor’s Office of Energy, but that’s where the similarities end. There’s no way of increasing your chances of winning, other than getting vaccinated in the first place. Chances are, you probably didn’t directly pay for anything, though you may have indirectly paid for your vaccine and the pandemic relief funds through a portion of your taxes.

Though Vax Nevada Days might not be a lottery, however, it does raise an important question: Should Nevada have a lottery? Should we amend what’s clearly overt industry protectionism out of our state constitution and permit our state and local governments to provide Nevadans one more game of chance to spend our money on?

No.

Don’t get me wrong, I don’t like industry protectionism written into our state constitution, either. The existence of that provision philosophically and aesthetically annoys me. Practically, however, the only way anyone would spend the political capital to do so would be to make it possible for Nevada to conduct its own lotteries — and that’s a bad, wasteful idea.

The first problem with state-run lotteries is they do indeed compete against privately-run gaming businesses — and they do so poorly. According to the April 2021 Gaming Revenue Report, if you put money into a slot machine in Nevada, casinos kept a little more than 7 percent, which means, on average, customers won back roughly 93 percent of the money they put into them. Your odds of making your money back at a table game are a bit lower, on average — casinos kept a little over 12 percent, which means their customers won back a little less than 88 percent. 

By comparison, the best-paying game offered by the California Lottery, Scratchers, only pays back 70 percent. The lottery is budgeted around the assumption it will only pay back 66 percent of the money its customers pay into it — far less than the roughly 85 percent Nevada’s casinos give back to their patrons. Government-run lotteries are a consistently worse deal for their customers by design. 

The second problem is that a state-run lottery is wasteful and duplicative. The California Lotto requires administrative overhead — government employees, in other words, none of whom directly distribute a single lottery ticket to a single person. That job goes to retailers, who are paid a commission for each lotto ticket they sell. Nevada, meanwhile, already has a Gaming Control Board, slot machines in nearly every gas station and grocery store in the state, and, oh yes, several casinos as well, which already collect tax dollars on games of chance.

If Nevadans aren’t happy with the amount of money we’re collecting from our gaming industry, we don’t need to build a second gaming industry with a second set of administrators, distributors, and customers. We can just raise the percentage fee we charge — in other words, we can raise our existing gaming taxes. The process is the same (raising state revenue, no matter how you do it, requires a two-thirds majority of the Legislature), only doing so leverages our existing gaming infrastructure instead of creating a duplicative government-run one, which would pay worse odds, to compete against it.

Should we? That’s a separate question. 

One question, however — should Nevada create a state lottery? — has a very clear answer: What happens in California should stay in California.

David Colborne was active in the Libertarian Party for two decades. During that time, he blogged intermittently on his personal blog, ran for office twice as a Libertarian candidate, and served on the Executive Committee for his state and county Libertarian Party chapters. He is now the father of two sons, an IT manager, and a registered non-partisan voter. You can follow him on Twitter @DavidColborne or email him at [email protected].

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