Could Nevada Legalize State Lottery To Make Up For Massive Lost Revenue?

Written By Marc Meltzer on December 18, 2020

Nevada is running at a financial deficit thanks to the global coronavirus pandemic.

In a recent press conference, Gov. Steve Sisolak estimated the state loses $52 million in gaming tax revenue every month casinos remain closed. This tax revenue doesn’t include money coming from other amenities offered at casinos, such as shows, dining and hotel rooms.

While the state lost massive revenue when casinos were ordered to shut down in March, the pain has continued throughout the year. Despite reopening in June, casinos have been limited to 25% or 50% capacity, obviously limiting the amount of gaming tax revenue a casino can pay.

Lost gaming tax revenue extends beyond casinos. Bars and taverns with slot machines, video poker and keno have similar capacity limits and were closed longer than casinos.

With a colossal hole in the Nevada budget in 2021, the state grapples to get back to the pre-pandemic revenue. Gambling is ubiquitous in Nevada. However, there’s one type of “gambling” not legal in the Silver State.

One way to make up the loss in tax revenue in 2020 would be to finally allow Nevada residents to play the lottery next year.

Nevada is one of the few states without a lottery

Nevada residents can play gaming machines anywhere from casinos to supermarkets. Bettors can place wagers anywhere within the state thanks to mobile sports betting apps.

However, Nevada is one of the few states that doesn’t offer any kind of lottery to its residents, alongside Alabama, Alaska, Hawaii and Utah.

Lotteries were originally outlawed in the Nevada state constitution, which was ratified in 1864. Here’s section 24 of the Nevada constitution that discusses lotteries.

1. Except as otherwise provided in subsection 2, no lottery may be authorized by this State, nor may lottery tickets be sold.

2. The State and the political subdivisions thereof shall not operate a lottery. The Legislature may authorize persons engaged in charitable activities or activities not for profit to operate a lottery in the form of a raffle or drawing on their own behalf. All proceeds of the lottery, less expenses directly related to the operation of the lottery, must be used only to benefit charitable or nonprofit activities in this State. A charitable or nonprofit organization shall not employ or otherwise engage any person to organize or operate its lottery for compensation. The Legislature may provide by law for the regulation of such lotteries.

In 1990, there was an exception to the “no lottery” statute that allows charities to offer lotteries.

There have been various attempts to allow voters to legalize the lottery in Nevada. All have been declined. Most recently, a 2009 bill that would have allowed residents to vote on the topic was shot down.

Some Nevada residents already play the lottery

Nevada residents visit retailers on the other side of state lines, traveling to the likes of Arizona and California, to play the lottery. When national lotteries reach huge jackpots, even more Nevadans will stand in line for hours on end in order to potentially strike it rich.

In 2018, residents from Nevada and California stood in a massive line just about 50 feet away from the state line to buy Mega Millions tickets for a $1 billion drawing.

While the town of Primm is located in Nevada, the Primm Lotto Store is actually in Nipton, California. The money placed at this and other similar stores could have benefited the state of Nevada.

The state would collect revenue from offering a lottery. A retailer inside state lines would not only make revenue from lottery sales but also other products purchased.

More lottery winners inside of the Silver State would redistribute at least some winnings to other businesses. There’s a lot of potential benefits that can come from Nevada offering a lottery.

Nevada could certainly use a financial win. Tax revenue pays for plenty of public services, such as education, police and road maintenance. That lost tax revenue from gaming will certainly affect Nevada residents in all walks of life.

Legalizing new forms of gambling is taking place throughout the country. A state like Colorado expects to see a boost in tax revenue from legal sports betting this year. New York is contemplating legalizing online sports betting in an effort to increase its tax revenue next year.

Types of lottery games

Lottery games have changed a lot over the years. It’s not just picking numbers or scratching off a generic ticket. Here are some of the ways to play the lottery around the country:

  • Daily and weekly state-wide lottery
  • Multi-State lottery (Powerball and Megabucks)
  • Instant Win lottery tickets (scratch-offs)
  • Online lottery games

Powerball and Megabucks get a lot of publicity because they both have large jackpots. Building up massive jackpots happen frequently because these games have a prize pool from multiple states.

Nevada could start with just state-wide lottery games or instant-win tickets if it wanted to tiptoe into offering lottery.

Eventually, Nevada residents would likely call for multi-state lotteries because of the large prizes. The large gaming manufacturers inside the state would likely lobby to offer their products. For example, slot machine maker Scientific Games offers a variety of lottery games, including popular licensed brands.

The lottery has hills to climb in Nevada

Nevada residents can gamble in some way, shape or form throughout the state. Casinos make up much of the gambling in Nevada but not all of it. Players can visit an array of retail outlets to play machine games.

Casinos have long lobbied the government to keep lotteries out of Nevada. The thought is that spending money outside a casino will hurt the gaming industry. That might have been a viable argument in the past, but states like Mississippi are allowing casinos to sell lottery tickets.

The lottery isn’t accepted by all people. There are religious and conservative groups that oppose it, which is why both Utah and Alabama don’t offer these games.

Nevada can find lottery distributions to appease those who might not want the state to offer a lottery. One way to satisfy casinos is to allow them to sell these types of games.

Perhaps gaming manufacturers provide their games exclusively to casinos and other regulated gaming establishments. They already work together with slot machines and other games. The lottery offerings could just be another product line for these venues.

Even retail shops could sell different types of lottery products. There’s a variety of options available if Nevada officials want to legalize the lottery.

And when there’s a will, there’s a way.

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Marc Meltzer

Marc grew up on the mean streets of the South Bronx. He's the rare combination of Yankees and Jets fan which explains his often contrarian point of view. Marc is a freelance writer and social media consultant. Writing about steak, booze, gambling and Las Vegas is a tough job but somebody has to do it.

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