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CNN CROSSFIRE

Should the Government Be in the Gambling Business?

Aired August 27, 2001 - 19:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL PRESS, CO-HOST: Tonight, the lottery proves a big winner for David Edwards of Kentucky...

(BEGIN VIDEO CLIP)

DAVID EDWARDS, POWERBALL JACKPOT WINNER: Somebody who really needed the money really got it this time.

(END VIDEO CLIP)

PRESS: ... and for Sheryel Hanuman of Minnesota.

(BEGIN VIDEO CLIP)

SHERYEL HANUMAN, POWERBALL JACKPOT WINNER: I'm still in shock. I still wait -- I'd better pinch myself.

(END VIDEO CLIP)

PRESS: But is the lottery such a big winner for everybody else? Should government be in the gambling business?

ANNOUNCER: Live from Washington, CROSSFIRE. On the left, Bill Press; on the right, Tucker Carlson. In the CROSSFIRE, in Louisville, Kentucky, Powerball winner David Edwards; in Atlanta, Rebecca Paul, president of the Georgia Lottery Corporation; and in Las Vegas, Bill Thompson, professor of public administration at the University of Nevada, and author of "Gambling in America: An Encyclopedia."

PRESS: Good evening. Welcome to CROSSFIRE. The odds may have been 80 million to one, but they were pretty good odds for David Edwards of Kentucky, and Sheryel Hanuman of Minnesota, holders two of four winning tickets of Saturday night's $295 million Powerball.

Today, having split the pie, they'll each get lump sum of $41 million bucks or $2.9 million a year for the next 25 years. Even after the tax man takes 39 percent, that's a lot of dough, especially if like Edwards, you were out of a job, down to your last three unemployment checks, have a daughter to support, and need back surgery, but don't have any health insurance!

But as big a bonanza as it is to the lucky few, is the lottery still a good deal for everybody else? Or is it a false promise to lure scarce dollars from the poor? Tucker Carlson and I will get to those issues and debate them after we first break open the champagne tonight with one of today's big winners, David Edwards, joining us tonight from Louisville, Kentucky.

David Edwards, congratulations. Thanks for joining us. You're probably the richest man I ever spoke to. You know that?

EDWARDS: Thank you.

PRESS: And I'm glad...

EDWARDS: I'm happy about that.

PRESS: Yes, I bet you are. Now I'm confused about something, because I read, David, I heard rather at your news conference earlier today. You said you bought your ticket and you prayed to the Lord that you would win. Now David, so did I. And I think you and probably prayed to same Lord. Why you and not me, do you think?

EDWARDS: I don't know. I can't answer that. I know that I was in a desperate situation. And I've been raised in church. And I believe that good things can happen. And I was desperate. And so I really did pray to the Lord. And then when I did win, I praised Him.

PRESS: I hope so.

TUCKER CARLSON, CO-HOST: Yes, you did. Now David Edwards, I was very struck by a quote from you I read today. Let me read it back to you. "You dream you want a better life and playing this lottery has done that for me."

Let's just parse that sentence. You dream you want a better life. People come to America because they dream of a better life here. And so you played the lottery. Is this a message you'd pass on to your children? The lottery, your hopes reside in the lottery?

EDWARDS: You know something? In a way, it's the poor man's hope. Only one and half percent of the people in this nation is really got all the money. The rest of us work hard every day. We have homes and normal lives. And we try to acquire the things that we have. But as far as the big hotels and the Rolls-Royces, or being able to afford to send children to a university without them getting some kind of grant, we don't really have that.

And so a guy like me, we come home and we might fantasize for a minute. "Hey you know, I'd like to have this or that. We're never going to have it, no matter how hard we work." So really, if you really want to try to get that, the only vehicle to do that is the lottery.

PRESS: Now, you are a working man. And you also saw your -- in one of the wire stories today that you had spent sometime in prison, David. So I want to ask -- I'm just curious, have you heard from any of your former cellmates yet? Or do you expect to? One little share of the take maybe?

EDWARDS: No, I've changed my life a long time ago. And I've made mistakes in my past. And I have dealt with them. I paid my time. I went on with a positive outlook and I tried to change my life. And I've done that. I got into a good job, telecommunications. I've enjoyed the people that I have been around in the last two years. Intel Communications, positive people. And that's all I'm trying to do now.

CARLSON: Now tell us, David Edwards, it strikes me that it's almost required of lottery winners that they go out and buy something excessive, you know. I read that you're interested in maybe buying a Rolls-Royce convertible. What else? What other accessories are you going to get? Fur covered toilet seats? Let us into the mindset of a new lottery winner.

EDWARDS: Well, I have two answers for that. When we first got -- we're going to buy mansions and we're going to have a yacht and we're going to do this and that. I wanted to accept this money with humility. I'm glad that I'm 46 years old, when I've got this money. If I'd got this money earlier, I probably would have went right through it.

I don't know what all I'm going to get. We're putting money away for our children, so they can have a college education. I'm buying my little girl a computer, which I couldn't afford to buy her a week ago. She's entering the sixth grade. She come to me last week and asked me, "Daddy I need a computer."

I didn't have that money. I was trying to pay my bills, buy food. I had three unemployment checks left before I had nothing. And so right now, I'm just thanking God and trying to sit back and absorb all this.

We will get a better home. I'm not -- don't plan on buying the big mansion. We're going buying something that is a nice home for us, but we are going to splurge and buy us a couple of cars. And we was in Florida working. And I seen a Rolls-Royce. I was like a little boy in the candy store. And I seen this Bentley. And boy I said, you know, I could never have that. And I'm going to buy that. And Shawna's going to get a vehicle herself. She says a Porsche, but she's not for sure.

PRESS: OK. Just -- David, I just want to say please, don't feel guilty about spending it. Enjoy it. OK? That's my advice to you. But I want to ask you, would let us know how much -- you bought $8 bucks worth of Powerball tickets here. Have you played the lottery before? Did you usually play it? And how much did you usually put down? I'm just curious.

EDWARDS: I've been playing the Powerball for about a year and a half. And I usually play two or three dollars, two or three times a week. I quit playing the Powerball when I lost my job, when I got on the unemployment. I didn't feel that I should be gambling when I had to pay my bills. But when things got so desperate, I said, "What the heck. It's $280 million. I'm going to give it a shot."

PRESS: Yes, glad you did. Can I ask you a quick question?

EDWARDS: Yes.

PRESS: Tucker asked about buying things. You know, a lot of people today who have a lot of money try to buy their way into public office, you know, run for governor, run for Senate. Do you think about that?

EDWARDS: No, I really want to put back a lot of this money for my children and future generations after me. We're going to get nice house out of it. We're going to have a good life. It's going to give me the ability to do things I've never done. We want to travel. I think that's the main thing we're going to do with some of this money. Shawna and I both have always wanted to travel around the world. And now we have that power.

CARLSON: You know, it's a shame because I think you'd be every bit as good a senator as Jon Corzine. But let me ask you this, I read your ex-wife was married on the very day, Saturday, that you won the lottery. Probably a little late for this, but has she attempted reconciliation?

EDWARDS: No. And I don't think it would do any good. My fiancee wouldn't put up with that, but the ironic thing about that was, she got married at 6:00 on Saturday. And I become a millionaire at 11:30 that night. And the other ironic thing is, I found out I was a millionaire in parking lot of same hotel that she was at having her wedding reception.

PRESS: Well, David, just one last question here. I also read that you had to hire a couple of bodyguards. Or you did, at any rate, once you found out that you were the winner of lottery. And here you are on national television, kind of putting yourself out there as a winner. Are you worried about some of those kind of problems that you know you might have created for yourself or that winning may have created?

EDWARDS: We were. The main thing for the bodyguards was until we got this ticket to the Powerball office. Everybody and his brother come out to say, Hey, you remember me? I hadn't seen them in 25 years." Strange cars coming around. And so we were going to take as much measures as far as the security's concerned, to make sure that ticket got to the Powerball. After this, we're not going to have bodyguards.

CARLSON: David Edwards, thank you so much for joining on CROSSFIRE. Good luck with your Bentley. May I recommend green. And congratulations, of course. We've just seen the happy bright side of the lottery, but when Bill Press and I return, we'll see the dark side. We'll be joined by Rebecca Paul, who's president of the Georgia Lottery and by Bill Thompson. author of "Gambling in America." We'll be right back.

(COMMERCIAL BREAK)

CARLSON: Welcome back to CROSSFIRE. Feeling lucky? One in 80 million lucky? Then head to your nearest liquor store and buy a lottery ticket. It worked for at least four people last week. They won the multistate Powerball drawing. Now they are now very rich.

Millions of others didn't win anything. They are poorer. Chances are, however, they'll play again and lose again. Lottery supporters say the money will go to a good cause. Critics call it a tax on the poor, uneducated and credulous. Should the government be in the gambling business?

In the CROSSFIRE tonight, Rebecca Paul, president of the Georgia Lottery Corporation, and Bill Thompson, professor of public administration at the University of Nevada at Las Vegas.

Rebecca Paul, thanks for joining us.

REBECCA PAUL, PRESIDENT, GEORGIA LOTTERY CORPORATION: Certainly.

CARLSON: "The Palm Beach Post" had a fascinating story a couple of days ago. You probably saw it. Here are the highlights. In Florida, uneducated people are twice as likely to buy lottery tickets as well educated people. Poor people are three times as likely to have a lottery outlet in their neighborhood. And adjusted for income, the poor and uneducated spend seven times as much on the lottery, as the rich and well educated. This is clearly a tax on poor people, is it not?

PAUL: Well, let's start with your last statement. If you make $20,000 a year and you buy $1 in a lottery ticket, it's a bigger portion of your income than if you make $100,000 a year and spend $1 on a lottery ticket.

But that's going to be true whether you go to movie, or you go bowling, or you buy a six-pack of beer. So when you adjust for income, anything you spend in discretionary dollars when you're in a lower income is a bigger percentage of you income.

If you talk about where lottery outlets are located, 78 percent of the tickets in Georgia are sold at gas stations. Gas stations probably aren't in gated communities. So you know, people buy tickets where gas stations are located, particularly here in Georgia.

And your third issue is, it's not a tax. So it's voluntary. There aren't many taxes that you choose whether or not you wish to participate in.

CARLSON: But it is clear, I mean, there clearly is a connection between lottery advertising and the uneducated. It's not happenstance uneducated people are more likely to fall for your ads. They're misleading. Let me explain why.

When the Mafia ran the lottery, as it did the numbers until fairly recently, there was a $100,000 jackpot. The winner got $100,000. Not so now. With Powerball, for instance, it's broken up to payments $2.5 million for 29 years or something. You don't really win the jackpot, do you? So the Mafia, way more straightforward in its advertising than the States that now run Powerball? True?

PAUL: Well, let's start with your Palm Beach Post article about uneducated people played more than educated folks. A recent Gallup poll showed that the average lottery player nationwide was slightly more educated than the populous and had a slightly higher income than the populous. So I'm not quite sure about "The Palm Beach Post" story, when the Gallup poll nationwide showed that that wasn't the case across all 38 lottery states.

In terms of advertising, I think we make it perfectly clear that the jackpot, as advertised is paid out over a number of years. And I doubt if there are very many players, particularly when you choose -- you have to choose whether you want a cash option or you want the annuity. Don't understand that that's actually the case.

PRESS: Bill Thompson out there in Las Vegas. I've heard these arguments for so long, back to when California passed lottery.

BILL THOMPSON, UNIVERSITY OF NEVADA, LAS VEGAS: That's right.

PRESS: Let's look at David Edwards. We just had him on as a guest. His ex-wife gets married on Saturday. He goes out to the Pump and Shop...

THOMPSON: Just a wonderful story. Isn't it beautiful?

PRESS: But he goes out to the Pump and Shop in Ashland, Kentucky.

THOMPSON: Sure.

PRESS: He spends $8 bucks. In his lifetime, earning a salary, he could never get to $41 million. He could never invest in enough to make that in stocks or bonds. He buys -- puts down $8 bucks. He walks away with $41 million. Why not?

THOMPSON: It's government selling gambling to the American people. And I think CNN was just trying to sell gambling to American people and doing a great disservice. In the gambling business, Las Vegas runs on this philosophy, too. Winners talk, losers walk. Where are all the losers, talking about all the money they have lost?

You know, this person said the way you can get ahead in life is the lottery. And that's the only way. I dissent. I say if you become literate, you stay in school, graduate from high school, you work in high school, and go to college, you have a 9 out of 10 chance of making it in life.

Teach a person to fish and you've taken care of them for life. That person has a 5 in 10 chance of being affluent, one in 10 chance of being wealthy. The way to get ahead is education, and hard work in our society. CNN has done a disservice. Lotteries, when they spend a billion in advertising do a disservice, trying to sell this other story to America.

PRESS: Wait a minute, relax. Look, David Edwards will certainly agree the way to get ahead is get an education. This man came out of prison. He turned his life around. He's working for a living. He said when he got out of work, he didn't buy any lottery tickets. THOMPSON: Good.

PRESS: Except this time because it was $280 million. I think you've got to -- this is, you know, you take this if I may say so, too seriously. Let me...

THOMPSON: Yes, I'm taking -- go on.

PRESS: Let me ask you listen to what the head of the -- a spokesperson rather for the lottery here in the District of Columbia said, and I think that is the lesson where you've got to see it that it's just one way maybe the people can have some fun. Mr. Thompson, here he is.

(BEGIN VIDEO CLIP)

BOB HAINEY, D.C. LOTTERY SPOKESMAN: This is a game. It's about fun. It's not about a financial investment. The odds of winning this jackpot are one in 80 million. If you buy a bunch of tickets, you might increase your odds to say 10 in 80 million, 100 in 80 million. Well, there's not a big difference. It's still a long shot.

(END VIDEO CLIP)

PRESS: It's a long shot.

THOMPSON: Sure.

PRESS: And it's fine. So why not let people play it?

THOMPSON: OK, look it's government doing this. And government is taking money from poor people and shifting it over to wealthy persons. People, this person in Kentucky's now a wealthy person. We're celebrating it. Your Democratic Party is celebrating wealthy people.

That's not what I've heard from Tom Daschle for the last eight months, that W.'s not compassionate. He wants to give the tax breaks to the rich. Now all of sudden, the rich are wonderful. The lottery takes money from poor and shifts it to the rich.

PRESS: The difference is the tax cut is giving money to the rich. This lottery is giving money to a poor person. Don't you see the difference?

THOMPSON: Bill, the person now is worth $40 million. I would not call him poor.

PRESS: He was poor yesterday.

CARLSON: Now Bill Thompson, when you're in town next, I want to go out to dinner with you because I agree with every single thing you said.

Now Rebecca Paul, your bio, which I have in front of me, boasts that your lottery, Georgia State Lottery raised $1.13 billion dollars in its first year.

THOMPSON:

CARLSON: Specifically how much of that was spent -- did the state use to treat compulsive gambling?

PAUL: By our state law, we spend $200,000 a year on a funding compulsive gambling hotline.

PRESS: Total?

PAUL: 200,000 a year.

CARLSON: So out of 1.13 billion, you spend $200,000 a year on a hotline? You're aware of the fact that the latest study done is three years ago, estimated that there were more than 20 million compulsive gamblers or people on the road to compulsive gambling in the United States. And you spent $200,000? That is the least compassionate thing I've heard this year. Please defend it.

PAUL: Well, certainly it's done by the public policy makers in the state of Georgia. And they decide how the dollars are spent. And they look at studies that show where compulsive gambling comes from. And it's not inherent in a lottery ticket.

People who are addicted to gambling like quick action, winning on the turn of a card, the throw of a dice, the horse crossing the finish line. Yes, buy ticket on Friday and find out on Saturday whether or not you won. They like much better odds. You know, you won't find a compulsive gambler at a track, betting on the long shot. They'll bet on the 8 to 5 shot, rather one in 80 billion shot. If you look at the...

CARLSON: Oh. So it's not really addictive? It doesn't really cause cancer? I've seen this before. Wait a second.

PAUL: Wait, well let me just finish. It's not skill.

CARLSON: Compulsive gamblers need treatment. Why not give it to them?

PAUL: Well, it's a state policy issue. And $200,000 is what goes in Georgia. There is no other form of gaming in Georgia. And compulsive gambling in Georgia is not at the high level that it is in other states that have other forms of far more addictive gambling.

PRESS: So Mr. Thompson, I want to ask you, even though you're a professor at the University of Nevada Las Vegas. From what I hear you say, you're against all forms of gambling, even those casinos on the strip?

THOMPSON: I did not say that.

PRESS: Well, how can you be against the lottery and for those big casinos that are stealing from poor people every day? THOMPSON: Do you want me to give you the differences? Number one, the people that come to our Las Vegas, they fly in, over half of them. They stay four days, four nights. They spend more money on nongambling activities than gambling activities. When they go to the tables, they get a 95 percent return for their play.

It's entertainment. We do not tell people, "This is how you turn around your life and you make money." If people think that, stay away from Las Vegas. You're going to lose your money, but you're going to have entertainment and fun and probably, the best entertainment values in America. But we don't foster this idea of get rich by gambling.

PRESS: No, pardon me, would please listen carefully. OK?

THOMPSON: OK, I'm listening.

PRESS: Listen carefully to what you said. These people fly in.

THOMPSON: That's right.

PRESS: OK, money. They spend 4 nights in those hotels. That's money. They're buying all those meals. That's money.

THOMPSON: That's right.

PRESS: And you're against a guy spending a buck at a gas station to get a lottery ticket? You've got it backwards, friend.

THOMPSON: If you can't afford.

PRESS: It's Las Vegas that's ripping people off.

THOMPSON: I'll tell you about the poor people. Today it would take $300 on lottery tickets and a couple would put $600 aside for a year, save it for 20 years, they could put three kids through college at a public university with tuition. And that's not gambling. They'd get the kids through college. But no, they throw it away on this. And they say, "The only way my kid can go to college is if I win lottery. "I don't believe it. And this is Democrats selling this to America. I don't believe it.

PRESS: Wait a minute, this isn't Democrats selling to America. Democrats...

THOMPSON: Two governors elected on -- two governors elected on this a platform last year Democrats.

PRESS: Both Democrats and Republicans support the lottery.

CARLSON: You're on fire, David Thompson. I agree with everything you said. Amen.

THOMPSON: Tucker's my man.

PRESS: Agree with Rebecca Paul. Big deal.

CARLSON: We've got to go unfortunately. Bill Thompson, Rebecca Paul, thank you both very much.

THOMPSON: Thank you.

CARLSON: We could go on and on and on. Thank you.

PRESS: All right. And we'll be back with closing comments. Coming up, more comments on -- I might even share my lottery ticket with you. I would.

(COMMERCIAL BREAK)

CARLSON: OK, Bill, the saddest line I have heard this here literally is when David Edwards described the lottery as "the poor man's hope." If that is all the hope a person like David Edwards has, it's pathetic. And maybe it's the government that's encouraging that attitude, totally counterproductive attitude, is wrong.

PRESS: Yes, I hear the new philosophy of the Republican Party, which is let's bring back the Mafia and let them run the lottery. I understand that.

CARLSON: Privatize, Bill. Privatize.

PRESS: Yes, bring back organized crime. Great platform. Run for office. I want to tell you the saddest line. The saddest line is my sister-in-law in Hockessin, Delaware went to the Books and Tackle Shop or whatever it is.

CARLSON: Books and tobacco.

PRESS: Books and tobacco. And she thought the line was too long. That's where the winning ticket was sold. So she turned around and walked out. That's the sad line.

CARLSON: I'm sure, because she...

PRESS: My brother...

CARLSON: ...has better things to do with her life than to loom around some liquor store, waiting for a chance to something that's not ever going to happen. It's pathetic.

PRESS: Books and tobacco.

CARLSON: Books and tobacco.

PRESS: There's no liquor. My brother's $41 million poorer tonight. That's a sad line.

CARLSON: You'll be the first in line to borrow from him.

PRESS: From the left, I'm Bill Press. You're damn right. Good night for CROSSFIRE.

CARLSON: And from the right, I'm Tucker Carlson. Join us again tomorrow night for another edition of CROSSFIRE. TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com

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