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Feasibility of Instituting and Operating a Lottery in Alaska
Prepared by Edward Pavsek
Professor Sheri Ann Smith authorized a study to determine the feasibility of instituting and operating a lottery in the state of Alaska. Currently, Alaska is one of 1 states that do not have any form of government-operated lottery. With increasing budget shortfalls projected over the near future, various programs historically funded by the legislature face diminished budget allocations unless alternative revenues can be generated to supplement traditional funding sources. Lotteries are not a substitute for the taxing power of the state; rather, in the states with lotteries funds generated by the lotteries are used to enhance allocations already in place for a wide variety of social programs. I researched several aspects of the feasibility of having a lottery in Alaska 1) I conducted primary research by distributing and collecting questionnaires surveying the interest among Alaskans in having and participating in a lottery; ) I researched secondary print and electronic media to gain an understanding of the historical use of lotteries in the United States and to determine the amounts of revenues derived by lotteries in other states; and ) I researched the strength and diversity of the Alaska economy. Based on my research, I recommend that the Alaska legislature take steps to implement a lottery. There is substantial support among Alaskans for having a lottery and there is interest in participating in one if it is instituted.
Based on my conclusions, I offer the following recommendations
1. I believe the implementation and operation of a lottery in Alaska is feasible. Therefore, I recommend that the Alaska Legislature introduce enabling legislation for the creation of a state lottery commission as a first step in implementing a lottery in Alaska. My primary research indicates a strong interest in having a lottery in Alaska, and my secondary research indicates that a lottery will impose little, if any, additional budgetary burden upon a state already facing increasing budget deficits. Also, with potential budget restrictions reducing outlays for important social needs, such as education, lottery proceeds could be used to augment funding in discretionary areas of the budget. While the amounts to be generated from a lottery are impossible to predict, Alaska™s population is adequate to support a lottery. Seasonal influxes of visitors add to the real population base and increase the available pool of players.
. I recommend that the lottery commission, if created, solicit bids from the various lottery retailers currently operating lotteries in other states. Concurrent with such bid solicitation, I recommend a thorough canvassing of the lottery commissions in other states for further advice based on their experiences in operating a lottery.
. Alternatively, I recommend that the questions of whether to have a lottery in Alaska and what form the lottery should take are ones that could be added as a ballot referendum during the next general election, thereby removing professional politics from the choice of Alaskans.
4. Finally, I recommend that Alaska join a multi-state lottery such as the PowerBall lottery to augment revenues from an Alaskan lottery. My research indicates that per capita spending on PowerBall in states having their own lotteries averages almost $0; this would result in a projected increase of almost $0 million dollars in lottery profit over that generated by a state lottery alone.
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