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States that use lotteries to fund mental health systems: 37 and growing

May 12, 2017

Kansas lawmakers are considering joining 37 other states to legalize lottery vending machines as a way to fund the state’s struggling mental health system.

The idea, conceived by Rep. Chuck Weber, R-Wichita, is expected to increase funding to mental health services by $12 million over two years. The funding would go toward crisis stabilization centers, which offer an alternative to jail or hospitalization for someone having a psychotic break, as well as toward mental health clubhouses, which provide support to people with long-term mental illness.

“I was trying to think creatively about how we can provide a crucial service without burdening the taxpayer and raising taxes,” Weber said. “I saw this as sort of a win-win, something that can be seen as ‘voluntary’ funding because no one forces anyone to buy a lottery ticket.”

His amendment to fund community mental health services was attached to legislation that would allow the Kansas Lottery to place vending machines in convenience and grocery stores and social hubs such as bowling alleys. The bill passed the state House and Senate and is headed toward a conference committee.

Proponents of implementing the vending machines have worked to legalize them for several years, but they have never gotten this close to passage. Sally Lunsford, spokeswoman for the Kansas Lottery, said that allocating the funding toward mental health may help push lawmakers who are on the fence toward voting for the measure.

Kyle Kessler, executive director of the Association of Community Mental Health Centers of Kansas Inc., says the funding will help a system that has faced deep losses and provider shortfalls. The recession and budget cuts resulted in a loss of $30 million toward mental health programs in the state during the past eight years.

“Do I think it’s great policy? Not necessarily,” Kessler said. “But we cannot sustain any more cuts.”

Weber has opposed expanding other gambling measures in the past but said he saw an opportunity for bipartisanship.

“I’m not a big gambling guy, but if we’re going to expand access, then maybe this is a way to turn something I’m not terribly excited about and turn it into a positive,” he said.

Small businesses have supported the move. Lunsford said the Kansas Lottery estimates that roughly 300 to 400 of the state’s 1,740 eligible facilities would use the vending machines. She said it would allow more convenience for stores, whose customer lines can become backed up from lottery sales or that have to bring in additional staff to accommodate Powerball players.

Opponents have been generally anti-gambling or are concerned that minors might buy tickets. Some worry, as well, that giving people the ability to buy lottery tickets through a machine might be counter-productive for those who struggle with compulsion toward gambling or addiction, which is itself considered a mental health problem.

Keith Whyte, executive director of the National Council on Problem Gambling, which supports expanding access to treatment programs for people with gambling addictions, said the state needs to fund these services if it’s going to be in the business of owning and operating lottery services. He noted that Kansas is the only state that operates its own casinos and that funding for gambling addiction in the state is inadequate. The state’s Problem Gambling and Addictions Grant Fund is monetized through a 2 percent tax on casinos, totaling $7.3 million a year.

Half of those with gambling addictions also have a substance or mental health disorder, which means that the funds collected from vending machines could ultimately go toward treatment for those who abuse them. While Whyte noted some of the funding from the new bill could help reach people with gambling addictions, he said he thought the program represented “misaligned incentives” and said “the first thing funded should be for problem gambling programs.”

“The costs of an untreated gambling addiction are significant,” he said, citing costs of bankruptcy and crime. “It seems gambling is one of the last discretionary spending methods state budgets have. They are reluctant to raise taxes and often expand gambling to fund fundamental government programs.”

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