Nevada Lottery's Moment is Now

Rio Hotel and Casino in Las Vegas, Nevada

The concept of a Nevada Lottery resurfaces periodically, with my initial endorsement dating back to March 2015.

The COVID-19 pandemic will bring significant budgetary challenges to our state, marking a historical moment where the need for solutions cannot be ignored. Throughout history, the idea of implementing a lottery has often been met with resistance and quickly dismissed from conversations. However, now more than ever, it is crucial to consider this alternative as a means to mitigate the impact of these unprecedented circumstances. A lottery presents an opportunity to alleviate the financial strain and cushion the blow that our state will face in the wake of this crisis.

Out of the fifty states in America, there are only five that do not have a lottery system in place. Those states are Nevada, Alabama, Alaska, Hawaii, and Utah. While the latter two do not permit any form of legalized gambling, the former two have recently shown promising signs of progress towards legalizing lotteries. Nevada, however, stands in a league of its own when it comes to its unique and distinctive gambling regulations.

Nevada defies conventional arguments against lotteries.

In any other state, I would readily align myself with the numerous compelling arguments against state lotteries. It is an issue that hits close to home, particularly for low-income families who bear the brunt of gambling problems linked to lotteries. This predicament is especially relevant in states that lack the ubiquitous presence of slot machines in gas stations, bars, and grocery stores.

In many Nevada neighborhoods, one can easily find an abundance of subpar gambling options at their disposal. When considering the potential loss, the variance between investing an hour playing penny slots at a local gas station and purchasing $20 worth of Powerball tickets appears to be minimal. However, it is worth noting that as the stakes increase, the latter option of buying lottery tickets becomes a more favorable choice in terms of potential returns.

Grant gaming establishments exclusive rights to operate lotteries in order to satisfy their demands.

The largest industry in Nevada, the gaming industry, has long been against the idea of introducing a lottery. Their worry stems from the potential competition for gambling revenue that the state would face. It's a valid point, and fortunately, there is a way to address this concern.

To make it more lucrative for retailers, Nevada could exempt the revenue from margin taxes. Therefore, I propose limiting the sale of lottery tickets to establishments that already hold a gaming license. It just makes sense, as most of these places are where people usually go to buy lottery tickets anyway. Imagine going to a casino, store, or bar and being able to purchase your lottery tickets right there. To incentivize these establishments, they would receive a five percent commission on every ticket sold, as well as bonuses for selling jackpot tickets. This would help them cover any perceived losses from offering an additional form of gambling to their customers.

Nevadans are already purchasing lottery tickets from alternative states.

It's worth noting that lottery opponents often overlook the fact that Nevadans are already actively participating in these games. According to a 2009 article from the New York Times, the California Lottery store located in Primm, which is approximately 40 miles south of Las Vegas, generates a staggering $13 million in annual sales. Interestingly, this particular retailer consistently ranks as the top seller of California Lottery tickets within the state.

Since then, Nevada's population has seen growth, so it is necessary to add an additional $3 million to account for this development. When considering the figures, it is worth mentioning that the closest California Lottery retailer to Reno managed to sell $6.3 million in tickets annually, as stated in the report. Furthermore, when adjusted for inflation, these two stores alone contribute a substantial sum of $25.5 million each year in terms of lottery sales.

The charming town of Littlefield, nestled between Nevada and Utah, boasts the largest Arizona Lottery retailer. This hidden gem serves as the sole exit along Interstate 15, captivating travelers with its allure. Surpassing all expectations, this retailer celebrated an outstanding achievement with a staggering $2.2 million in sales during the fiscal year of 2009. Incredibly, this small-town haven outshined its closest competitor, situated a mere hour south of the magnificent Hoover Dam, by an impressive 40 percent in sales. White Hills, the second-place contender, simply pales in comparison to the thriving success of the Littlefield retailer.

Already, Nevadans are contributing approximately $30 million annually to out-of-state lotteries, a tale that speaks volumes. However, the potential for growth in this realm is staggering, considering the inclusion of sales to individuals who refuse to endure an hour-long commute and queuing, as well as tourists who eagerly purchase tickets at various resorts.

Set the legal drinking age at 21 years old.

It's been said that allowing a Nevada Lottery could potentially open the door to underage gambling, as the minimum gambling age in the state is 21. However, there is a straightforward solution at hand. By setting the minimum age for purchasing lottery tickets at 21, we would align with the practices of other states like Arizona, Iowa, Mississippi, and Louisiana. These states have already implemented this measure to ensure responsible gambling. In doing so, we would effectively address concerns about underage individuals accessing gambling opportunities while still providing the chance for adults to participate in the lottery.

There is no necessity for immediate gaming experiences.

Nevada, contemplating a strategic move, could follow in the footsteps of North Dakota and Wyoming, states that have opted for state lotteries focused solely on lotto drawings, excluding scratch-offs from their offerings. These two states have taken a unique approach by creating their own in-state lotto games and participating in interstate pools for all other lotto games. By adopting a similar strategy, Nevada could significantly reduce startup and administrative expenses while eliminating a segment of games that might directly compete with the popularity of slots.

During the fiscal year of 2019, the state of North Dakota managed to sell a staggering $33.4 million worth of lottery tickets, resulting in a substantial contribution of $9.3 million to the state's revenues. In the previous fiscal year of 2018, Wyoming, despite having a smaller population, successfully sold $28.7 million worth of lotto tickets, which generated $9.4 million in tax revenue. Interestingly, when comparing these figures to Nevada, a state known for its bustling tourism industry, it becomes evident that population alone does not dictate lottery ticket sales. In fact, Nevada's population is four times larger than that of North Dakota and five times larger than Wyoming, even before accounting for the influx of tourists. This goes to show that various factors, such as marketing strategies, local interest, and the allure of potential winnings, play a significant role in lottery ticket sales, irrespective of population size.

Casino Lottery Research Forecasts Millions in Yearly Tax Revenues

Back in 2007, there was a study conducted by Boyd Gaming and Station Casinos that was looking into the potential revenue that a state lottery could bring to Nevada. The study estimated that the state could generate approximately $48 million in lottery revenues each year. Now, when we take inflation into account, that number increases to around $60 million. And if we factor in the 20 percent population growth that has occurred since then, we're looking at a whopping $72 million. Additionally, the study predicted that implementing a state lottery would create 316 new jobs. However, on the flip side, it was also estimated that the gaming industry would lose about 595 positions as a result. Of course, these numbers would need to be adjusted to reflect the passage of time and the population growth that has taken place.

If there is still opposition to implementing a lottery for gaming, then consider increasing gaming taxes as an alternative solution.

Now is an opportune moment to remind the gaming establishments that, in the event they continue to oppose a state lottery, they should consider the fact that Nevada's casinos currently have the privilege of paying the lowest commercial gaming tax rate nationwide. Our system appears to undercharge high volume unrestricted licenses, particularly. It is crucial to generate revenues, and the query at hand is whether the operators prefer to cover the costs themselves or shift the burden onto individuals who are willing to contribute taxes voluntarily.

Constitutional amendment needed

As an inevitability arises from the budget crisis brought on by COVID-19, it appears that a special session of the Nevada Legislature is on the horizon. Among the potential items on the agenda, there is talk of introducing a constitutional amendment pertaining to a lottery. Should this amendment successfully pass, it would then be subject to another vote by lawmakers in 2021. And if, during each legislative session, a majority in both chambers were to support the lottery constitutional amendment, it would ultimately be presented to the public for a crucial ballot decision in November 2022, necessitating a majority vote to officially become a constitutional amendment.

In Nevada, there exists an alternative, more cumbersome method to pursue a constitutional amendment for a state lottery. It entails the collection of a number of signatures equal to or surpassing 10 percent of the registered voters who participated in the prior statewide election within each congressional district. Achieving this would necessitate a minimum of 113,000 valid signatures. Given the prevailing circumstances of the ongoing COVID-19 pandemic, the deadline of June 16 appears unfeasible to accomplish such a formidable task. In the event that the amendment successfully passed in November, it would subsequently require reevaluation on the ballot in November 2022 for final confirmation.