The wave of gambling caused by the start of the Public Welfare Lottery has prompted an intense debate over whether lottery fever is getting too hot. The minister of finance has said the ministry will closely monitor the lottery and add a warning on tickets or alter the frequency of drawings if necessary. But we still have not seen any reports or data from the min-istry or TaipeiBank informing the public just how "hot" the lottery really is.
In fact, there is a good way to judge if the lottery is too hot -- comparing the value of lottery tickets sold with GDP figures.
We have gathered data from many countries, including GDP and the amount spent on lottery tickets each year. This data can be used to work out the amount of money spent on a lottery as a proportion of the GDP.
The higher the value, the more intense the gambling and the greater the effects on the economy. Let's call this value the "Lottery Heat Indicator."
The indicators for the UK, US, Canada, Australia, Japan and Hong Kong are 0.46, 0.38, 0.67, 0.41, 0.2 and 0.36 percent, respec-tively. The indicators for Asia as a whole, and for North America plus Europe, are 0.39 and 0.35 percent respectively (according to 1997 data) and the national average is approximately 0.4 percent.
The finance ministry estimates that spending on the lottery will reach NT$120 billion a year. Taiwan's GDP is about NT$10 trillion, so the Lottery Heat Indicator is 1.22 percent, two to six times higher than that of other countries. The lottery is not only overheating, it may already be burning up.
The lottery has many negative effects on society. It crowds out consumer spending, affects the expansion of domestic demand, is unhelpful to improving competitiveness and reduces consumption tax revenues and employment. Its effects are clearly negative and thus the less money spent on the lottery, the better it will be for economic development.
Many people say "other countries have lotteries, why can't Taiwan have one?" This overlooks the fact that it is very rare for the total amount of money spent on lotteries to take up such a large proportion of GDP and that the lottery will have a greater impact in Taiwan than other national lotteries.
Looking at the statistics, Tai-wan's lottery can only be called healthy and stable if the amount spent on it falls to around NT$40 billion. If it exceeds that amount by too much, it will harm the economy and society.
Peng Tien-haw is the founder of the Anti-lottery Activity Coalition (