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The lottery: will business win?

Although nearly everyone expects the lottery referendum in November to pass, Indiana business is not likely to benefit from the vote, say three Indiana University researchers.

IU professors John L. Mikesell, C. Kurt Zorn and Larry DeBoer studied the economic impact of the lottery. They concluded, DeBoer says, that "economic development for the state from the introduction of a lottery would probably be negligible."

Lottery supporters say approximately $140 million leaves Indiana every year to buy tickets for lotteries in Illinois, Michigan and Ohio. If Indiana hosted its own lottery, proponents argue, that money would support Indiana retail lottery outlets instead.

According to State Sen. John D. Bushemi, a Gary Democrat, studies conducted in lottery states demonstrate increased general sales activity in ticket outlets. He also describes a lottery "spin-off effect," by which lottery ticket sales commissions paid to outlets lead to their hiring more employees.

"The citizens of our state support a lottery," Bushemi says. "The General Assembly has a responsibility to take action."

Zorn disagees. He maintains that lottery tickets represent no real increase in sales but rather a simple monetary hand-switching. Since the printing of tickets and purchase of equipment for an Indiana lottery would probably take place out of state, moreover, a lottery would produce almost no new direct business for Indiana. It would total fewer than 50 jobs statewide, DeBoer estimates.

Lottery opponents have capitalized on the professors' ideas. "The amount of money raised for the state from legalized gambling would in no way offset the social, economic and public-policy negative consequences that would result," says Dr. Herbert Kaplan, campaign manager for Indiana Citizens Against Legalized Gambling. The group, formed in the 1960s to combat a drive to establish pari-mutuel racetrack gambling in the state, is the leading organized opponent of the lottery proposal.
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Title Annotation:Briefs; Indiana state lottery
Publication:Indiana Business Magazine
Date:Oct 1, 1988
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