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On March 6, state Sen. Harold M. Metts introduced a bill that would require any new state gambling revenue be used for education.
That would include new revenue from the Twin River and Newport Grand slot parlors if they’re allowed to add casino table games.
Metts said he wants any additional gambling revenue to be used solely for supporting elementary and secondary education. That "would be a positive step toward honoring years of promises to fund education with gaming revenue," he was quoted as saying in a General Assembly news release. "Senator Metts said he remembers the birth of the lottery in Rhode Island, when state residents were enticed to vote for it with the promise that the money would be used for education," the release says.
Many Rhode Islanders share Metts’ belief that the Rhode Island Lottery was created based on the promise that the revenue would go into the schools.
But is that conventional wisdom based on fact?
When we asked what he based that statement on, Metts said that when he was campaigning for reelection last year, a senior citizen living at the Charlesgate nursing home grilled him about the lottery, saying that money was supposed to go to education.
He said the constituent was "very knowledgeable about politics" and he’d be surprised if the man was incorrect. "The generation ahead of me -- all they talk about is that the money was supposed to go to education," he said. "In their mind, that money was supposed to go to education."
So we went back in time to find out. Here’s some history about the lottery from its 2011 financial report.
On Nov. 6, 1973, voters approved a constitutional amendment clearing the way for the lottery’s creation the following year. "The original purpose of the Rhode Island Lottery was to make up for the revenue lost from allowing the value of a trade-in automobile toward the sales tax liability on a new automobile," the report states. It says nothing about dedicating money for education.
Now let’s go back a little further.
On Sept. 25, 1973, The Providence Journal reported that then-Gov. Philip W. Noel "embraced the idea that the constitutional convention should propose outright repeal of the lottery ban." The story noted that a member of the convention’s lottery committee, Roderick A.J. Cavanagh, R-Narragansett, had proposed that net lottery proceeds "be applied exclusively to or in aid or support of education in this state."
But two days later, the Journal reported that the convention’s lottery committee had voted 14 to 2 "against recommending that lottery proceeds be earmarked for a specific purpose such as education."
In an interview Tuesday, Cavanagh said "early on (funding for education) was a prime mover in a lot of the discussion, but as you can see, it didn’t stay that way. As it turned out, the money went to general treasury." Another 1973 convention delegate, former Sen. Raymond E. Grimes, D-Providence, said officials talked about earmarking lottery revenue for education, "but it was never promised."
The proposed constitutional amendment made no mention of mandating that lottery revenue go to education, and voters approved the amendment by a vote of 83,757 to 25,840. "Lottery is a big winner," the Journal front page announced on Nov. 7, 1973.
The story quoted Noel’s lawyer as saying the governor was committed to "removing the inequity of the sales tax on auto trade-ins with the proceeds of a lottery," and that if proceeds are sufficient he also intended to examine other sales tax areas.
The author of that 1973 story, former Journal political columnist M. Charles Bakst, said, "I do not recall a single official promoting the lottery by saying the money would go for education. In my opinion, this is a first-class myth."
Peter J. O' Connell, who retired in 1993 after nearly 20 years as the Rhode Island Lottery’s first executive director, said lottery revenue went into the state’s general fund rather that any specific area in the state budget.
O’Connell -- a retired state police major who joked that he "went from chasing bookies to being one of the biggest bookies" -- said that while some of that money ended up going to schools, the lottery revenue was never specifically earmarked for education. That notion might have been based on "rumors" or "wishful thinking," he said.
Gerald S. Aubin, the Rhode Island Lottery’s director for the past 16 years, agreed that lottery revenue has always gone into the general fund. He could think of just a couple of rare exceptions when instant ticket revenue went toward specific purposes, such as the arts.
Aubin said he often hears people saying that lottery revenue was supposed to be dedicated to education. "I’m often asked that question, or I hear it on the radio or see it in the newspaper. It has almost become factual," he said. "But I can never track down any evidence of that being the truth. Nothing I have ever seen supported that."
Patrick T. Conley -- a lawyer and historian who served as secretary for the state’s 1973 constitutional convention and participated in drafting the lottery amendment -- said lotteries thrived in Rhode Island between 1744 and 1843, and the revenue went to a variety of civic purposes, including education. But Rhode Island banned lotteries in 1843, and when that ban lifted with the 1973 constitutional amendment, lottery revenue went into the general fund rather than being earmarked for a specific purpose, he said.
"Certainly, a number of delegates in committee and in debate were hopeful that the revenue raised by the lottery would help fund our educational system, but there was never, to my knowledge, a serious amendment to earmark lottery money for education," Conley said. "The lottery was basically a revenue source for the state -- in emulation of New Hampshire, which had no income or sales tax but did have a lottery."
Bakst said, "I do have a guess as to why folks think the money was to go to education; I believe that early states to have a modern lottery -- New Hampshire, say -- did specify that the money go to schools. These early lotteries got enormous publicity because lotteries were such a novelty."
Indeed, New Hampshire launched the country’s first state lottery in 1964, and all the net revenue was earmarked for public education between kindergarten and 12th grade, New Hampshire Lottery Commission spokeswoman Maura McCann said. "That was the whole reason it passed successfully," she said. To date, the lottery has raised about $1.5 billion for New Hampshire public schools, she said.
Sen. Harold Metts said he remembered that voters were enticed to vote for the lottery because the proceeds would be used for education.
As it turns out, Metts, a retired educator, has inadvertently provided Rhode Island with a teachable moment. He certainly is not the first person to make that claim. But if he had done his homework, he would know that all the evidence shows that no such promise was made.
We rate his statement False.
News release, "Sen. Metts bill commits new gaming revenue to education," March 14, 2012
Rhode Island Lottery, "Comprehensive Annual Financial Report," for the fiscal year ended June 30, 2011
The Proceedings of the Rhode Island Constitutional Convention of 1973, state library, accessed March 21.
Interview, Roderick A.J. Cavanagh, 1973 constitutional convention delegate, March 27, 2012.
Interview, former state Sen. Raymond E. Grimes, D-Providence, March 27, 2012
Interview, Peter J. O’Connell, former Rhode Island Lottery director, March 22, 2012
Interview, Sen. Harold M. Metts, D-Providence, March 22, 2012
Interview, Patrick T. Conley, March 26, 2012
Interview, Gerald S. Aubin, Rhode Island Lottery director, March 26, 2012
Interview, Maura McCann, New Hampshire Lottery spokeswoman, March 26, 2012
Email, M. Charles Bakst, March 22, 2012
Providence Journal articles, "Lottery is a big winner," Nov. 7, 1973; "Lottery unit rejects earmarking of funds," Sept. 27, 1973; "Noel for outright lottery ban repeal," Sept. 25, 1973; "Outright or limited lottery ban repeal?" Sept. 17, 1973.
Providence Journal advertisement, "How to find your way around The Lot," May 13, 1974
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