Dollars for scholars

April 24, 1998

The National Lottery has made awards worth Pounds 76 million to higher education projects. The THES lists winners to date, examines how grants have been won and looks at the overseas experience

Vice or virtue? That is the uncomfortable question presenting itself to United States universities and colleges, which are becoming more and more dependent on revenues from gambling in the form of public lotteries.

Seven of the 50 states now earmark lottery proceeds for public colleges and universities or for student financial aid. In many cases, the pledges to support education were made to help win suppport for the introduction of legalised gambling. They also help sell tickets: many lotteries advertise themselves as benefitting education.

Three more states, Tennessee, Kentucky and South Carolina, are proposing lotteries to raise money for financial aid. New Mexico has started using lottery revenue for college scholarships, and New York state has put a novel spin on the idea by proposing a "dollars for scholars" lottery game that offers scholarships as prizes.

"More and more money is being earmarked for higher education using lottery funds," said Marvin Steinberg, a psychologist and vice-president of the National Council on Problem Gambling who recently testified before the National Gambling Impact Study Commission. "To convince folks to legalise lotteries, they try to pick out something like education so people will say, 'How could we not support our kids?'" Dr Steinberg said the money is hard to refuse. "It is no worse than taxes that derive from sales of alcohol or cigarettes. If something is legal and the dollars are coming in, it might as well be used for something good."

Some critics argue that university administrators, eager for their share of lottery proceeds, have turned a blind eye toward the social costs of gambling. Others complain that the money is supplanting, rather than supplementing, traditional sources of revenue for higher education.

Outside Nevada, gambling of any sort was illegal in the country until a few states instituted lotteries in the 1960s. Today, 36 states and the District of Columbia have lotteries. In the past few years, several states have legalised casino gambling. "We live in this strange world where gambling is seen as a vice one day, and the next day it is adopted by the state and it almost becomes your patriotic duty to do it," Dr Steinberg said.

But sometimes the promises kept have proven different from the promises advertised.

In Florida, where $250 million a year from lottery profits goes towards public universities and colleges, legislators have subtracted an almost identical amount of appropriations from general tax revenue. "In effect, the lottery in Florida, billed as an enhancement for education, has been almost a shell game," said Alan Stonecipher, a spokesman for the state university system.

In fact, a study of states that had adopted lotteries ostensibly to help schools and colleges found that they all spent less per head on education than states without lotteries.

The governors of Florida and Texas have tried unsuccessfully to require that lottery money be used solely for additional services and programmes and not as a substitute for tax revenue. Legislators, however, prefer to have the flexibility to use lottery proceeds anywhere they want.

Even critics grudgingly admire one state's lottery-financed education system. In 1993, Georgia established a lottery with all profits set aside for education, including university and college scholarships for residents who maintain a minimum grade-point average. Already the lottery has provided free or low-cost tuition to 200,000 students under the HOPE Scholarships, which are so successful that President Bill Clinton has held them up as a national model.

"It's all an add-on. It's all an extra for education," said John Millsaps, a spokesman for the Georgia Board of Regents. "That has helped to overcome a lot of the concerns."

Ninety-seven per cent of incoming freshmen at the flagship University of Georgia are benefitting from the lottery scheme. Georgia is now gambling that ultimately the funds will help raise the number of high-school graduates who go to college from 19 per cent.

"The long-term intent is to change behaviour, to make folks who would not have thought about education after high school think, 'Hey, I can do this. If I get the grades, I can go to college'," Mr Millsaps said.

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