Re-examining a national lottery

Tourism and Aviation Minister Dionisio D’Aguilar, who has responsibility for gaming, has reopened the public debate on creating a national lottery.

D’Aguilar noted: “Bahamians are crying for that. That’s very much front and center in my mind.”

The tourism minister stated: “My position is the status quo, in the eyes of many, including the government, needs tweaking. It warrants a discussion. They’re [the web shops] very happy because they’re making oodles of money…

“If I had a business making oodles of money, and some whippersnapper like D’Aguilar turns up and says the nature of the profits being generated by the industry for the benefit of so few, at the expense of so many, is generating too high a social cost and there needs to be a rebalancing, I might be unhappy, too…

“This whole industry has been shrouded in a certain element of secrecy,” he added. “We’ve got to have discussions and see where it’s going to go.”
Neil Hartnell reported in The Tribune: “Mr. D’Aguilar’s remarks effectively opened up a new front in his ongoing battle with the numbers houses, given that many – both inside and outside the industry – believed a national lottery had been ‘removed from the table’, and was not a subject for discussion, when the industry was ‘legalized’.

“With the web shops scooping up all domestic gambling proceeds, it was felt there would be insufficient appetite and income to fund a national lottery, and the former Christie administration dropped the idea.

“However, national and state lotteries in nations such as the U.S. and U.K. have raised millions of dollars for charities and good causes, and provided significant funding for projects that benefit society.”

Hartnell reported: “The national lottery topic arose as Mr. D’Aguilar effectively ‘doubled down’ on concerns he raised in Parliament last week, arguing that the web shops’ efforts to compare themselves to hotel casinos ‘shouldn’t be taken seriously’.


“While resorts such as Atlantis and Baha Mar generated billions of dollars in GDP impact and foreign exchange earnings, the minister said the gaming houses were wealth redistributors rather than creators – taking money from many, with the profits reaped by relatively few.”

This column has repeatedly supported a national lottery, the proceeds of which would be returned to the Bahamian people for various social and development initiatives.

In terms of social ethics this appears to be a wiser ethical choice than legalizing a gaming business with windfall profits flowing into the coffers of many in this now legal enterprise.

The legalization of all forms of gambling is opposed by some. For others, various forms of gambling are not inherently unethical. For the latter, the ethical and policy questions concern what forms of gambling and how gambling is to be administered, regulated and taxed.

These ethical and policy questions involve what kind of lottery system would be best for the country in terms of who would receive the greater benefit of funds generated by a lottery.

With a national lottery, most of the funds should go to the Public Treasury, utilized for public purposes like a greater number of scholarships for students, more financial support for culture, sports, youth programs and other initiatives of social good.

Given the country’s precarious financial status and the possible risk of future credit downgrades, the government would be foolhardy if it did not consider the creation of a national lottery.

The U.K. National Lottery may be a template for The Bahamas as we look at introducing such a system in The Bahamas. Most countries in our region have public lotteries.

Instead of a national or public lottery benefitting significantly more Bahamians, the former government regularized/legalized a privately owned lottery system in which the majority of the profits accrue to already wealthy individuals, with the government receiving some funds from taxing the private lottery.

We are faced with extraordinary economic challenges, including significant public sector deficits and debt. The wealth revenue derived from gaming in the form of a national lottery can be utilized to broaden economic development and empowerment, and decrease the annual deficit.

Economic value
Unlike other economic enterprises, those who run the gaming houses produce nothing of economic value in terms of the gaming business itself.

Instead of allowing certain individuals to rake in the vast majority of the profits from a lottery, we should have our money collected into a public lottery with the bulk of the proceeds being returned to the Bahamian people.

Money pours out of poorer neighborhoods and many Family Island communities into the bank accounts of a relative few, with next to nothing returning to these communities, often leaving them even more impoverished.

These communities do not need Christmas parties and giveaways. They need concentrated economic and social investments partly derived from a national lottery in which money is reinvested in these communities.

The idea of allowing Bahamians a few shares in the lottery business was meant to sweeten the pot and drum up support for the Yes Vote in the gaming referendum/opinion poll.

The current idea of a public offering is being done for very specific strategic reasons, including public relations.

Instead of a few shares, a few tokens to the masses, the Bahamian people should be the majority shareholders and owners of a legalized lottery system, a sort of modern asue that can be used to advance national development.

Political and economic debates have raged for centuries over the state’s role in balancing or negating the effects of the natural and social lotteries of life.
For progressives, government plays a critical role in addressing the inequality involved in life’s lotteries, especially on matters such as ensuring access to education, healthcare and a variety of social goods.

Public action can go a long way in terms of equality of access if not equality of outcome. Which raises the question of gaming lotteries. A lottery is unlike other businesses. It is based exclusively on chance and luck.

Walk into a grocery store, spend $20 and you come out with that amount of grocery. Walk into a web shop or play $20 online and you come away with a “hope” which is more often than not dashed.

You usually come away with nothing or next to nothing, rarely winning that pot of gold at the end of an ever-elusive payout at the end of an imaginary rainbow.

In playing games of chance most people lose substantially more than they gain. Lotteries often prey on fear and hope, superstition and randomness. It involves the ultimate irrational exuberance. Still, lotteries can transform certain human traits into certain common goods and gain.

A public or national lottery is typically designed to expand opportunity and equality for citizens. They ensure a greater common good than do private lotteries which overwhelmingly concern the narrow interests of a few, with little by way of return to the mass of citizens.

Because of the nature of lotteries, in most civilized societies they are largely government-owned and for a reason. These societies utilize lotteries to help rebalance the lotteries of life which leave fellow-citizens in need of help from the state.

Accordingly throughout the U.S., the U.K. and many other countries lottery profits are used overwhelmingly to fund public goods such as education rather than to primarily enrich already bulging private coffers.

National lotteries are decidedly more consistent with the demands of social justice than are lotteries from which most of the profits accrue to relatively few.

During the 2017 general election the FNM proposed an ambitious agenda of economic and social development.

If the Minnis administration is to realize its program of change and transformation including, youth entrepreneurship programs targeted tax incentives for inner-city communities, the expansion of solar energy, the creation of a Native Food Market in New Providence and comprehensive social intervention initiatives, among other ideas, it will need new and consistent sources of revenue.

While a national lottery is not a panacea in terms of public revenue, a public lottery can provide significant revenue, without the need to increase certain taxes. The challenge is how to create and introduce such a national lottery that is well run, accountable and a significant source of revenue.