Editorial Exploration versus lotteries

There is something wrong with a system that encourages people to spend money on government-operated lotteries while companies involved in mineral exploration go begging. Lotteries contribute nothing to society. In fact, they undermine some of the qualities upon which our society is built. Gambling itself is an ancient form of recreation, and whether to participate is a decision best left to the individual. But when governments get involved, gambling gains society’s stamp of approval. That endorsement is not bestowed because of benefits derived from lotteries. It comes simply because governments are unable to control their spending and thus are desperate for revenue.

If lotteries were run through private enterprise and profits taxed like other businesses, they would be hard to argue against. When government holds a monopoly on lotteries, however, it is as if society itself were saying that those who work hard in order to achieve a better life are little more than fools. The message is that the smart people are those who get rich quickly.

For those who can afford them, lottery tickets are a diversion; for the poor who can least afford them, they are an almost irresistible chance at a better life.

But not only do the government agencies that run the lotteries prey on the dreams and fears of those who can least afford such a “voluntary tax,” they encourage them. An advertisement campaign in Ontario says a lottery ticket is a ticket to freedom. It implies that people are imprisoned in their jobs and that a lottery ticket can set them free. It is a message totally at odds with efforts to promote the idea that doing a job well can be fulfilling, that the virtues of hard work, loyalty and commitment will be rewarded.

But aside from those philosophical questions, what is particularly galling about government-run lotteries is the way they drain money from other ends. Mining stocks in Canada traditionally have been nurtured by the same motivation that prompts Canadians to buy lottery tickets today — the chance at a big win. With mining stocks, while the risk is high, there is some opportunity to choose based on a knowledge of the industry.

Today lotteries are siphoning off money that might otherwise have gone into mineral exploration. Ontario is a prime example. The Ontario Lottery Corp. expects to rake in $1.5 billion this fiscal year from the sale of lottery tickets. The corporation has sold $11.3-billion worth of tickets since it was formed in 1975, but less than half of that has gone to lottery winners. Some 16% or more than $1.8 billion has gone to administration and ticket sellers’ commissions. The province takes about 37% — $484 million last year alone — and puts it into general revenues.

Spending on mineral exploration in Ontario doesn’t come close to that. In 1990, exploration spending in Ontario is expected to be about $200 million. Total exploration spending for the entire country is estimated at only $850 million. In 1991, total spending across Canada is expected to be about $700 million.

And, while mineral explorationists struggle to find the ore reserves needed to maintain a vital sector of the nation’s economy, lottery winners walk away with tax-free cash. If lottery winners were treated the same way investors in mining stocks were treated, they would at least have to pay capital gains tax on their winnings.

In Canada today, however, it is painfully obvious upon whom our elected representatives deign to smile upon. Lottery players will be wooed with taxpayers’ money while those who try to develop the nation’s mineral wealth are forgotten.