The Virginia Lottery: Twenty Years of Scratching

When it was first proposed in the General Assembly in the early 1980s, many Virginians took a dim view of the state lottery. They didn’t like the idea of state-sponsored gambling and suggested that if the state needed additional revenues, it should raise them the old-fashioned way — by increasing taxes.

The more serious criticism was that those who could least afford it would be the main players. They would keep pursuing that jackpot with a set of lucky numbers. They weren’t daunted by the long odds against them. Their numbers would hit at some point. That usually doesn’t happen in a game in which the odds are tilted toward the state.

Nonetheless, Virginia voters approved the lottery in a statewide referendum in 1987 and the games began in 1988. The Virginia Lottery is celebrating that 20th anniversary this month with a new raffle and other special events designed to call attention to the milestone.

The first lottery tickets were sold on Sept. 20, 1988. The only game available was a “Match 3” scratch-off ticket that cost $1 and paid a top prize of $5,000. Those early scratching tickets, as they were (and are) called, gave way to dozens of other tickets today — tickets that can cost up to $20 and pay as much as $1 million. The most popular price point for scratch-off tickets, according to lottery officials, is $5.

The revenues to the state have been good, as well. In its first two decades, the lottery has posted nearly $20 billion in sales, according to Paula Otto, executive director of the games. More than half of that has been returned to players in prize money and slightly more than $6 billion has been contributed to the state treasury. Retailers have received more than $1 billion in commissions and operational expenses have run at about $1.3 billion over that time.

Of special interest to Lynchburg residents is the fact that Gilliam Cobbs, a retired educator and former member of City Council, sits on the five-member Virginia Lottery Board. He was appointed to the board by Gov. Mark Warner in 2002 and reappointed by Gov. Timothy M. Kaine to a second five-year term ending in January 2012.

It was only natural, one supposes, that a fight would brew among legislators over how these new revenues would be spent by the government. In the beginning, the proceeds of some $140 million were dedicated to capital construction projects. That way, according to conventional wisdom at the time, no single state service or agency would become dependent on the money.

But that didn’t last long. A year later, in 1990, the proceeds were transferred to the state’s general fund, making that pot of money dependent to an extent on the sales of lottery tickets. That lasted until 1999, when a state budget amendment sent the lottery proceeds to local public school divisions to be used for educational purposes. An amendment to the state Constitution a year later directed that all lottery profits be used solely for the state’s public schools.

In 2007, the most recent year for which figures are available, that amounted to $437 million for public schools.

Proceeds from the lottery have shown a steady increase over the years, mitigating the argument about dependency on gambling for core state services. The lottery agency can take credit for much of that by offering new games over the years to maintain interest.

The scratch-off tickets remain the old standby and Otto says the secret there is to capitalize on pop culture and turn it into a lottery game. The Deal or No Deal televison game show, for example, has spawned a new scratch ticket.

It hardly seems possible that the lottery is 20 years old. And it is still generating substantial revenues for the state. Thomas Jefferson was right all along. As a lottery advocate in the early 1800s, he called it a “voluntary tax.” And so it is.