Government Lotteries

Report Outline
Renewal of Interest in Public Lotteries
Lotteries for Public Revenue
Lotteries and the Law of the Land

Renewal of Interest in Public Lotteries

Faced with the unpleasant duty of voting further cuts in income tax exemptions or a general sales tax, or both, in an election year—and possibly a withholding tax or some plan of enforced savings—members of Congress are turning a more attentive ear than at any time since the low point of the depression to projects for a national lottery Three bills to raise war revenues through prize drawings by the Treasury have been offered in Congress since the United States entered the war. While there is little likelihood that any of these measures will reach the stage of floor consideration at any early date, lottery projects will increase in attractiveness as taxation becomes more burdensome and federal deficits mount to still higher levels.

Depression Arguments for a National Lottery

Lottery bills were introduced recurrently during the decade of the ‘thirties, the first on June 8, 1933. They were most strongly urged for enactment in 1934 and during the business recession of 1937. After the House had given its approval to the first New Deal tax bill, estimated to yield some $263 million, hearings on the Kenney (D., N. J.) national lottery bill were authorized by the Ways and Means Committee in April, 1934. The committee failed to act on the bill that year or the next year or the next, and in 1937 Kenney circulated a petition to discharge the committee from further consideration, but he was unable to obtain the 218 signatures required to bring the measure to the floor. The bill was strongly opposed by Speaker Rainey, who said: “The country has not yet been reduced to the extreme of accepting such a revenue measure.”

At the 1934 hearings it was argued that the government needed the money, that the urge to gamble was a fundamental trait of the American people, that very large sums—estimated as high as of 1 billion—were taken out of the country annually by foreign lotteries, and that total United States spending on all forms of lotteries, foreign and domestic, ranged between $4 billion and $6 billion a year. Many of these lotteries were corrupt; the government would perform a service to the people, and gain a handsome profit for itself, if it established an honest lottery in which Americans could “take a chance” without violating the law.