8 ms·

Lotteries: America's $70B Shame

74 points by ctingom 11y ago

Houstonymous 11y ago
I'm pretty sure we let the government run the lotteries here in the US because it's a lot better than when the gangs would run them. It's much the same argument for drug legalization, really... if people are going to be stupid, and you know they're going to be stupid, at least help them be smart about being stupid.
- radarsat1 11y ago
  Yup, and it's not like the US is alone in this endeavour.. https://en.wikipedia.org/wiki/Lotteries_by_country https://en.wikipedia.org/wiki/Lotteries_by_country
- sanxiyn 11y ago
  We should also cut tax on lottery tickets. It would reduce economic inequality. http://econlog.econlib.org/archives/2015/05/low_hanging_fru.html http://econlog.econlib.org/archives/2015/05/low_hanging_fru....
Smaug123 11y ago
Duplicate from two days ago: http://www.theatlantic.com/business/archive/2015/05/lotteries-americas-70-billion-shame/392870/ http://www.theatlantic.com/business/archive/2015/05/lotterie...
- jessaustin 11y ago
  ITYM: https://news.ycombinator.com/item?id=11365501 https://news.ycombinator.com/item?id=11365501
ideonexus 11y ago
I would never think of playing the lottery or engaging in any other form of gambling because I understand the odds are always in favor of the house. I understand that I'm going to lose money. What a terrible irony that we fund public education with a lottery that relies on participation by those who don't understand basic math? But I see this as part of a larger trend of preying on the poor. Watching far-right media, I see poor people being told to invest heavily in gold, reverse mortgages, guns, and raging them up into sending all their money to political organizations whose sole purpose is to take money from the angry. And there are plenty of examples on the left as well (people investing in college degrees for the sake of college degrees without any idea if their field of study is a good investment or not). I don't know how we break these cycles and inspire low-income American citizens to temper their emotions and rationally invest in their futures.
- walshemj 11y ago
  That depends if the prize is large enough then the pot odds are such it does make sense to bet on the lottery.
  - nmrm2 11y ago
    1. This basically never happens. 2. Don't compare to letting the money sit under a matress. Insteaad, compare with other investments. Buying a lottery ticket doesn't make sense when measured purely in terms of profit, even when the expected profit is non-negative.
    - cauterized 11y ago
      Then neither does buying a movie ticket make sense. Of course it doesn't make sense if you frame it as an investment. But people don't necessarily buy lottery tickets expecting to win and more than you or I sit down at a slot machine expecting to walk away with more money than we arrived with. They buy them as entertainment or a reason to hope or dream for a few days.
      - 11y ago
thenadamgoes 11y ago
Wow. What's going on in North and South Dakota that there's such a big divide?
- bluthru 11y ago
  Fracking.
- gozur88 11y ago
  In oil country the wages are really good and there isn't much to do.
  - jessaustin 11y ago
    That doesn't explain the difference between North and South Dakota.
    - gozur88 11y ago
      Aren't there a lot fewer oil workers in North Dakota?
      - jessaustin 11y ago
        Currently, with the price as low as it is, I don't know. While the "boom" was on, there were actually more in North Dakota.
maerF0x0 11y ago
@OP put May 2015 in the title.
maerF0x0 11y ago
A lottery is a better investment than other crap the poor often buy. Crack, TVs, xboxes, alcohol all have a EROI of 0. A lottery at least is >0 . Better would be if we sold partials of VT(I) in the store at lottery ticket prices. $2 for a near 0 chance at 1B, or $2 for a near 100% chance at $4 given enough time.
- kdamken 11y ago
  This is a sad truth that's a lot less flashy of a headline, so it's not surprising it's not covered. You're unlikely to see an article with the title: "People who buy stupid shit they don't need and can't afford shocked to find they are still broke". Much easier to blame the lottery. Yes, poorer people like to buy lottery tickets. They want a chance to rise up and be rich, and there's really no other way most of them can ever do that.
  - maerF0x0 11y ago
    > They want a chance to rise up and be rich, and there's really no other way most of them can ever do that. Then maybe lottery tickets are actually smart.
- jimrandomh 11y ago
  Ask someone if they would sell their TV to buy lottery tickets. They'll say no, because a TV delivers lots of entertainment value. Lotteries don't. Calling them entertainment is just an excuse for scamming money out of people. Calling them investment is just trying to confuse things.
pklausler 11y ago
Lotteries are a self-assessed tax on poor critical thinking skills.
exolymph 11y ago
This issue boils down to the proper function of government: ensure people's freedom to act as they wish (barring negative impact on others), or enforce the "healthiest" behavior? Yes, buying lottery tickets for any reason other than entertainment is irrational. But does that mean it shouldn't be allowed? People are choosing to spend their money like this. Personally, I prefer a government that lets people do stupid things -- e.g. buying a lottery ticket with the expectation of winning -- to a government that paternalistically enforces middle-class norms.
- wrong_variable 11y ago
  > "Personally, I prefer a government that lets people do stupid things" What an ignorant statement to make. Are you okay with people making "stupid decisions" like smoking in public places ? Are you okay with people making "stupid decisions" like driving drunk ? Are you okay with people making "stupid decisions" like shooting up a school ? Society works when we look out for each other - and not let people do whatever they think is "right".
  - crazy1van 11y ago
    I think his caveat of "barring negative impact on others" pretty much covers these cases.
    - wrong_variable 11y ago
      > "barring negative impact on others" You think taking what little money poor people have from them via allowing them to spend it on lottery does not have social consequences ?
      - palakchokshi 11y ago
        Ummm what happens when you apply your argument to allowing them to spend it on alcohol or cigarettes or a car or a thousand other things? This is a flawed argument my friend. No one group has a right to enforce their social, moral, economic or other ideology on another group based on what the enforcing group thinks is "right". That's a slippery slope with extra grease on it.
rm_-rf_slash 11y ago
"When you play the lottery, sometimes you win and sometimes you lose. But it's better than using drugs or alcohol because when you use drugs or alcohol, you always lose" - "American Movie" People who don't play the lottery are always so quick to dismiss it. They disregard how accessible it is - you don't need a next-gen console or flat-screen tv, just cash - as they disregard how independently fun it is - you could be sitting alone in a dark room with nothing but a lottery ticket in your hand and be perfectly satisfied with fantasies of winning. It's like discussing guns with people who will never use them. Let's not get too carried away by sensationalism and look at this from a bird's-eye view: lotteries are great sources of revenue (better than state corporate income taxes? Holy cow!), they are low-health-risk (someone may need treatment for gambling addiction but it never hurts their lungs or livers), and they are easy to scale up and down. If the regressive-tax-on-the-poor argument is too convincing for you to resist, then here's a solution: register lottery purchases so you can only buy $X in lottery tickets based on your $Y income. Just don't come crying to me when the state comes for your income and property taxes to make up the difference...
- VLM 11y ago
  Speaking of drugs, and registry, one big problem would be its an extremely expensive small time form of money laundering. The way to destroy money laundering would be to eliminate small returns of $2 on a $1 ticket (at maybe 5% odds). The lottery is a very expensive way to get clean traceable money, but often enough not much clean traceable money is required.
  - DanBC 11y ago
    I used to think it'd be weird for criminals to use gambling to launder money - it'd be too expensive. But then I heard about FOB machines. The UK has something called "fixed odds betting machines". These are sometimes used to launder money. http://www.theguardian.com/uk-news/2013/nov/08/gambling-machines-drug-money-laundering-bookies http://www.theguardian.com/uk-news/2013/nov/08/gambling-mach... > Earlier this month the Gambling Commission, the industry regulator, fined Coral bookmakers £90,000 in profits it made from one drug dealer who had laundered almost £1m in its shops. Last month the industry regulator also publicly admitted what has long been privately acknowledged: FOBTs present a "high inherent money-laundering risk". The machines take £200 at a time. This would have been mostly in £10 and £20 notes. It's not clear from the article if the launderer put the whole £1m through the machines, or "just" £90k. > Dealers feed their drug money through the machines, losing a little and then cashing out with the vast majority of their stake, James says. They can then collect a printed ticket showing they have gambled that day – meaning that if stopped by police, they can answer questions about why an apparently unemployed young man carries hundreds of pounds in rolled-up cash. Either way, it's a lot of cash.
savanaly 11y ago
>According to the North American Association of State and Provincial Lotteries, lotteries took in $70.1 billion in sales in the 2014 fiscal year. That’s more than Americans in all 50 states spent on sports tickets, books, video games, movie tickets, and recorded music sales. One should be careful when making this sort of comparison-- at least from the standpoint of the overall economy. The cost of "producing the lottery" is more or less fixed relative to its revenue, i.e. its marginal cost is free, but it's not necessarily free for the other good they're comparing it to. For consumers to increase the number of movie tickets they buy or books they buy, more theaters have to be built or books have to be printed. The cost of producing the extra consumption goods is relevant, precisely because there is nearly zero cost of producing the consumer good that is a lotto ticket. In other words, money is changing hands (mainly from the poor people's hands into the government's and from there who knows), but resources are not being consumed like they would be if we were constructing new movie theaters all over town. That particular aspect of the lottery is actually praiseworthy and might be missed by a simple comparison of consumer spending on it vs "all these other forms of entertainment combined".
- rm_-rf_slash 11y ago
  As I said elsewhere, it takes nothing more than a printer with ink and paper. No terminals, no coin-collectors, nothing else. We shouldn't antagonize a ruthlessly efficient method of revenue because people make bad decisions. Whether it's killing a man or providing jobs to miners, the dynamite doesn't care.
MichaelBurge 11y ago
The poor do a lot of dumb things: They don't track their money, they rack up credit card debt, they don't plan to minimize taxes, they depend on payday loans and check cashing services, they drink and smoke and do drugs, they constantly overdraft their bank accounts, they spend too much on entertainment, etc. The middle class are better with this, mainly because they have more money and so are less likely to be fined for non-payment. I know some family approaching 60 who are still paying off the house, 2 cars, and an RV. If that wasn't bad enough, they play the lottery every week because "somebody has to win". I still think we should abolish social security, but after seeing countless examples of people racking up debt buying stuff they don't need and then depending on it in old age to avoid starving, it's almost enough to make me think it has some merit. I feel like that entire line of thought with government-enforced retirement accounts leads to increasing taxes on the poor since they can't be trusted to responsibly spend it. Which actually might be what a lottery is.
sremani 11y ago
For me lotteries is one of the reason, I have grown skeptical of State. 1. They Lie, Lie about funding schools and lottery is the only way to do it. 2. Lie about the Prize money, the advertisements of lottery are untruthful and a private entity would be charged with fraud. 3. The practice of gaming the game, i.e. they try to make lotteries popular and sink a lot of money for advertising, they claim 50% goes for prizes but of the remaining 50% a lot goes to advertising than going to schools. 4. Taxing the winning, splitting the wins. Even if you win, you will be short-charged depending on the number of winners. 5. Exclude non-State entities from having their own lotteries, State monopoly. 6. Corporate tax cuts are pretty much common in states that aggressively promote lottery, lotto and video poker. Even if it is entertainment, which it is not, Government should not be in it. I am not against lotteries, they need to competitive and have should have a level transparency, that is currently lacking since the law makers are the law breakers.
- eric_h 11y ago
  > Even if it is entertainment, which it is not Just because you don't find it entertaining does not mean it's not entertainment. I'm not necessarily disagreeing with your other points, but gambling of all types is most certainly an entertainment product, regardless of its tendency to create addiction, etc.
- godzillabrennus 11y ago
  I agree that government should step out of it and all gambling with published, vetted by an independent authority and fully transparent procedurally gambling models should be legal for private industry to pursue. Let government tax them like they do alcohol and tobacco.
bbarn 11y ago
My father once won $100,000 from a scratch off ticket. It was a $20.00 scratch off ticket. I gave him crap for years over it because between playing Keno, and buying other scratch offs, he's probably spent close to that trying to recreate the effect. The thing is, he's very serious about his lottery. He enters every losing ticket into a second chance registration on Maryland's lottery site. (This was how I got him to start using the internet, actually) He won a few times and knows what he's losing. He's not bad at math. He's not rich either, he lives off of a very small military pension and has a job filling vending machines on a route. I've pressed him again and again about how stupid the lottery is. I've pointed out the math, the bad odds, the addictive design of the games.. you name it. His answer remains the same. A shrug and "It's fun." I have since realized after spending afternoons with him at the places he likes to play, that it's his own odd social network. He knows all the employees, the other regulars. He complains about politics to the other players. He sweet talks the old ladies behind the counter. It's his excuse to leave the house. He keeps making his mortgage payments, keeps making his wife dinner every night, and takes care of his mother. If he wants to blow his fun-money on lottery at this point, I've just quit arguing with him and I go play with him when I visit. Losing 40 bucks to spend the afternoon with my old man is a bargain, in my eyes.
- smt88 11y ago
  I'm not surprised that there are anecdotes of people who play in a (mostly) harmless way. One question I have is whether there might be another way for your dad to have an equally fulfilling amount of fun without losing as much money. It would depend on the individual, obviously. The problem with lotteries is that many of the players aren't like your dad. There are some serious ethical questions that arise when you think of lotteries are guaranteed to lose the vast majority of players a substantial amount of money: 1) If the state didn't run the lottery, who would? Would that money get funneled into public works if the state didn't run the lottery? 2) Is it ethical to market the lottery in order to create new players? 3) When the lottery is marketed (as it heavily is in many states), is it targeting vulnerable groups, like the poor? 4) Is playing the lottery an expression of hopelessness for some people? They know that their $5 is never going to multiply to $10 (the way it might for a wealthier person), so it's easier to risk that $5 for a chance to win $5 million.
xixi77 11y ago
Really, people should pause before calling behavior that does not conform to their model or their own preferences "irrational". The typical argument goes like "Expected monetary payoff is negative, therefore buying a lottery ticket an irrational decision" -- but this ignores, for example, the possibility of winning a life-changing prize, that would provide enjoyment far above and beyond what e.g. investing money spent on lottery would, and there is no reason why this possibility cannot compensate for the expected loss. Technically speaking, claims of irrationality implicitly rely on assumption of concavity of preferences, but there are good reasons to think that it's not always correct.
- ryandrake 11y ago
  Isn't the "Expected monetary payoff" of starting a company negative?
  - welterde 11y ago
    It's not purely chance how well a company will do. And if you just consider the statistics I wouldn't have thought that the fraction of companies failing is that extreme for it to be negative in the expectation value (especially if you group it into different categories, etc.). Economically it sounds counter-intuitive to me as well.
- Guvante 11y ago
  Most of the complaints about people playing the lottery being irrational are about people spending huge amounts of money, not about playing the lottery at all. For instance the recent story of someone dumping their rent check into Powerball.
mandarlimaye 11y ago
We should abolish income tax and introduce mandatory lottery
- rm_-rf_slash 11y ago
  When I'm done laughing I'm going to take this suggestion to my college's economics and federal policy faculty...
transfire 11y ago
Lotteries are really a great wait for the state to collect taxes. Unfortunately the way the are currently handled results in too much profiteering/skimming/corruption.
aznpwnzor 11y ago
I don't see it as preying on the poor. I see it as a hobby / investment of the poor due to thousands of other factors that already prey on the poor. Imagine you have 0 chance of having any savings and barely staying ahead on your mortgage. The breakdown is this: upper class: easy access to what you want and need middle class: easy access to what you need lower class: difficult access to what you need If you are never going to have disposable income and forever be barely a paycheck ahead, what investments are available to you? You raise your child as well as you can for the school district and streets you live on, at best they go to a low-tier state school -> more debt. You can't retrain for a job because you are half a paycheck away from needing to take a second job. In this situation, the outcomes are this: don't play lottery -> 100% stay poor play lottery -> 99.99999% stay poor what do you choose?
diogenescynic 11y ago
The government runs lotteries because otherwise criminal organizations would. Now if only the US government would apply this same 'harm reduction' strategy to other 'crimes' like marijuana use.

74 points by ctingom 11y ago

I'm pretty sure we let the government run the lotteries here in the US because it's a lot better than when the gangs would run them. It's much the same argument for drug legalization, really... if people are going to be stupid, and you know they're going to be stupid, at least help them be smart about being stupid.

radarsat1 11y ago
Yup, and it's not like the US is alone in this endeavour.. https://en.wikipedia.org/wiki/Lotteries_by_country https://en.wikipedia.org/wiki/Lotteries_by_country
sanxiyn 11y ago
We should also cut tax on lottery tickets. It would reduce economic inequality. http://econlog.econlib.org/archives/2015/05/low_hanging_fru.html http://econlog.econlib.org/archives/2015/05/low_hanging_fru....

Smaug123 11y ago

Duplicate from two days ago: http://www.theatlantic.com/business/archive/2015/05/lotteries-americas-70-billion-shame/392870/ http://www.theatlantic.com/business/archive/2015/05/lotterie...

jessaustin 11y ago
ITYM: https://news.ycombinator.com/item?id=11365501 https://news.ycombinator.com/item?id=11365501

ideonexus 11y ago

I would never think of playing the lottery or engaging in any other form of gambling because I understand the odds are always in favor of the house. I understand that I'm going to lose money. What a terrible irony that we fund public education with a lottery that relies on participation by those who don't understand basic math? But I see this as part of a larger trend of preying on the poor. Watching far-right media, I see poor people being told to invest heavily in gold, reverse mortgages, guns, and raging them up into sending all their money to political organizations whose sole purpose is to take money from the angry. And there are plenty of examples on the left as well (people investing in college degrees for the sake of college degrees without any idea if their field of study is a good investment or not). I don't know how we break these cycles and inspire low-income American citizens to temper their emotions and rationally invest in their futures.

walshemj 11y ago
That depends if the prize is large enough then the pot odds are such it does make sense to bet on the lottery.
- nmrm2 11y ago
  1. This basically never happens. 2. Don't compare to letting the money sit under a matress. Insteaad, compare with other investments. Buying a lottery ticket doesn't make sense when measured purely in terms of profit, even when the expected profit is non-negative.
  - cauterized 11y ago
    Then neither does buying a movie ticket make sense. Of course it doesn't make sense if you frame it as an investment. But people don't necessarily buy lottery tickets expecting to win and more than you or I sit down at a slot machine expecting to walk away with more money than we arrived with. They buy them as entertainment or a reason to hope or dream for a few days.
    - 11y ago

thenadamgoes 11y ago

Wow. What's going on in North and South Dakota that there's such a big divide?

bluthru 11y ago
Fracking.
gozur88 11y ago
In oil country the wages are really good and there isn't much to do.
- jessaustin 11y ago
  That doesn't explain the difference between North and South Dakota.
  - gozur88 11y ago
    Aren't there a lot fewer oil workers in North Dakota?
    - jessaustin 11y ago
      Currently, with the price as low as it is, I don't know. While the "boom" was on, there were actually more in North Dakota.

maerF0x0 11y ago

@OP put May 2015 in the title.

maerF0x0 11y ago

A lottery is a better investment than other crap the poor often buy. Crack, TVs, xboxes, alcohol all have a EROI of 0. A lottery at least is >0 . Better would be if we sold partials of VT(I) in the store at lottery ticket prices. $2 for a near 0 chance at 1B, or $2 for a near 100% chance at $4 given enough time.

kdamken 11y ago
This is a sad truth that's a lot less flashy of a headline, so it's not surprising it's not covered. You're unlikely to see an article with the title: "People who buy stupid shit they don't need and can't afford shocked to find they are still broke". Much easier to blame the lottery. Yes, poorer people like to buy lottery tickets. They want a chance to rise up and be rich, and there's really no other way most of them can ever do that.
- maerF0x0 11y ago
  > They want a chance to rise up and be rich, and there's really no other way most of them can ever do that. Then maybe lottery tickets are actually smart.
jimrandomh 11y ago
Ask someone if they would sell their TV to buy lottery tickets. They'll say no, because a TV delivers lots of entertainment value. Lotteries don't. Calling them entertainment is just an excuse for scamming money out of people. Calling them investment is just trying to confuse things.

pklausler 11y ago

Lotteries are a self-assessed tax on poor critical thinking skills.

exolymph 11y ago

This issue boils down to the proper function of government: ensure people's freedom to act as they wish (barring negative impact on others), or enforce the "healthiest" behavior? Yes, buying lottery tickets for any reason other than entertainment is irrational. But does that mean it shouldn't be allowed? People are choosing to spend their money like this. Personally, I prefer a government that lets people do stupid things -- e.g. buying a lottery ticket with the expectation of winning -- to a government that paternalistically enforces middle-class norms.

wrong_variable 11y ago
> "Personally, I prefer a government that lets people do stupid things" What an ignorant statement to make. Are you okay with people making "stupid decisions" like smoking in public places ? Are you okay with people making "stupid decisions" like driving drunk ? Are you okay with people making "stupid decisions" like shooting up a school ? Society works when we look out for each other - and not let people do whatever they think is "right".
- crazy1van 11y ago
  I think his caveat of "barring negative impact on others" pretty much covers these cases.
  - wrong_variable 11y ago
    > "barring negative impact on others" You think taking what little money poor people have from them via allowing them to spend it on lottery does not have social consequences ?
    - palakchokshi 11y ago
      Ummm what happens when you apply your argument to allowing them to spend it on alcohol or cigarettes or a car or a thousand other things? This is a flawed argument my friend. No one group has a right to enforce their social, moral, economic or other ideology on another group based on what the enforcing group thinks is "right". That's a slippery slope with extra grease on it.

rm_-rf_slash 11y ago

"When you play the lottery, sometimes you win and sometimes you lose. But it's better than using drugs or alcohol because when you use drugs or alcohol, you always lose" - "American Movie" People who don't play the lottery are always so quick to dismiss it. They disregard how accessible it is - you don't need a next-gen console or flat-screen tv, just cash - as they disregard how independently fun it is - you could be sitting alone in a dark room with nothing but a lottery ticket in your hand and be perfectly satisfied with fantasies of winning. It's like discussing guns with people who will never use them. Let's not get too carried away by sensationalism and look at this from a bird's-eye view: lotteries are great sources of revenue (better than state corporate income taxes? Holy cow!), they are low-health-risk (someone may need treatment for gambling addiction but it never hurts their lungs or livers), and they are easy to scale up and down. If the regressive-tax-on-the-poor argument is too convincing for you to resist, then here's a solution: register lottery purchases so you can only buy $X in lottery tickets based on your $Y income. Just don't come crying to me when the state comes for your income and property taxes to make up the difference...

VLM 11y ago
Speaking of drugs, and registry, one big problem would be its an extremely expensive small time form of money laundering. The way to destroy money laundering would be to eliminate small returns of $2 on a $1 ticket (at maybe 5% odds). The lottery is a very expensive way to get clean traceable money, but often enough not much clean traceable money is required.
- DanBC 11y ago
  I used to think it'd be weird for criminals to use gambling to launder money - it'd be too expensive. But then I heard about FOB machines. The UK has something called "fixed odds betting machines". These are sometimes used to launder money. http://www.theguardian.com/uk-news/2013/nov/08/gambling-machines-drug-money-laundering-bookies http://www.theguardian.com/uk-news/2013/nov/08/gambling-mach... > Earlier this month the Gambling Commission, the industry regulator, fined Coral bookmakers £90,000 in profits it made from one drug dealer who had laundered almost £1m in its shops. Last month the industry regulator also publicly admitted what has long been privately acknowledged: FOBTs present a "high inherent money-laundering risk". The machines take £200 at a time. This would have been mostly in £10 and £20 notes. It's not clear from the article if the launderer put the whole £1m through the machines, or "just" £90k. > Dealers feed their drug money through the machines, losing a little and then cashing out with the vast majority of their stake, James says. They can then collect a printed ticket showing they have gambled that day – meaning that if stopped by police, they can answer questions about why an apparently unemployed young man carries hundreds of pounds in rolled-up cash. Either way, it's a lot of cash.

savanaly 11y ago

>According to the North American Association of State and Provincial Lotteries, lotteries took in $70.1 billion in sales in the 2014 fiscal year. That’s more than Americans in all 50 states spent on sports tickets, books, video games, movie tickets, and recorded music sales. One should be careful when making this sort of comparison-- at least from the standpoint of the overall economy. The cost of "producing the lottery" is more or less fixed relative to its revenue, i.e. its marginal cost is free, but it's not necessarily free for the other good they're comparing it to. For consumers to increase the number of movie tickets they buy or books they buy, more theaters have to be built or books have to be printed. The cost of producing the extra consumption goods is relevant, precisely because there is nearly zero cost of producing the consumer good that is a lotto ticket. In other words, money is changing hands (mainly from the poor people's hands into the government's and from there who knows), but resources are not being consumed like they would be if we were constructing new movie theaters all over town. That particular aspect of the lottery is actually praiseworthy and might be missed by a simple comparison of consumer spending on it vs "all these other forms of entertainment combined".

rm_-rf_slash 11y ago
As I said elsewhere, it takes nothing more than a printer with ink and paper. No terminals, no coin-collectors, nothing else. We shouldn't antagonize a ruthlessly efficient method of revenue because people make bad decisions. Whether it's killing a man or providing jobs to miners, the dynamite doesn't care.

MichaelBurge 11y ago

The poor do a lot of dumb things: They don't track their money, they rack up credit card debt, they don't plan to minimize taxes, they depend on payday loans and check cashing services, they drink and smoke and do drugs, they constantly overdraft their bank accounts, they spend too much on entertainment, etc. The middle class are better with this, mainly because they have more money and so are less likely to be fined for non-payment. I know some family approaching 60 who are still paying off the house, 2 cars, and an RV. If that wasn't bad enough, they play the lottery every week because "somebody has to win". I still think we should abolish social security, but after seeing countless examples of people racking up debt buying stuff they don't need and then depending on it in old age to avoid starving, it's almost enough to make me think it has some merit. I feel like that entire line of thought with government-enforced retirement accounts leads to increasing taxes on the poor since they can't be trusted to responsibly spend it. Which actually might be what a lottery is.

sremani 11y ago

For me lotteries is one of the reason, I have grown skeptical of State. 1. They Lie, Lie about funding schools and lottery is the only way to do it. 2. Lie about the Prize money, the advertisements of lottery are untruthful and a private entity would be charged with fraud. 3. The practice of gaming the game, i.e. they try to make lotteries popular and sink a lot of money for advertising, they claim 50% goes for prizes but of the remaining 50% a lot goes to advertising than going to schools. 4. Taxing the winning, splitting the wins. Even if you win, you will be short-charged depending on the number of winners. 5. Exclude non-State entities from having their own lotteries, State monopoly. 6. Corporate tax cuts are pretty much common in states that aggressively promote lottery, lotto and video poker. Even if it is entertainment, which it is not, Government should not be in it. I am not against lotteries, they need to competitive and have should have a level transparency, that is currently lacking since the law makers are the law breakers.

eric_h 11y ago
> Even if it is entertainment, which it is not Just because you don't find it entertaining does not mean it's not entertainment. I'm not necessarily disagreeing with your other points, but gambling of all types is most certainly an entertainment product, regardless of its tendency to create addiction, etc.
godzillabrennus 11y ago
I agree that government should step out of it and all gambling with published, vetted by an independent authority and fully transparent procedurally gambling models should be legal for private industry to pursue. Let government tax them like they do alcohol and tobacco.

bbarn 11y ago

My father once won $100,000 from a scratch off ticket. It was a $20.00 scratch off ticket. I gave him crap for years over it because between playing Keno, and buying other scratch offs, he's probably spent close to that trying to recreate the effect. The thing is, he's very serious about his lottery. He enters every losing ticket into a second chance registration on Maryland's lottery site. (This was how I got him to start using the internet, actually) He won a few times and knows what he's losing. He's not bad at math. He's not rich either, he lives off of a very small military pension and has a job filling vending machines on a route. I've pressed him again and again about how stupid the lottery is. I've pointed out the math, the bad odds, the addictive design of the games.. you name it. His answer remains the same. A shrug and "It's fun." I have since realized after spending afternoons with him at the places he likes to play, that it's his own odd social network. He knows all the employees, the other regulars. He complains about politics to the other players. He sweet talks the old ladies behind the counter. It's his excuse to leave the house. He keeps making his mortgage payments, keeps making his wife dinner every night, and takes care of his mother. If he wants to blow his fun-money on lottery at this point, I've just quit arguing with him and I go play with him when I visit. Losing 40 bucks to spend the afternoon with my old man is a bargain, in my eyes.

smt88 11y ago
I'm not surprised that there are anecdotes of people who play in a (mostly) harmless way. One question I have is whether there might be another way for your dad to have an equally fulfilling amount of fun without losing as much money. It would depend on the individual, obviously. The problem with lotteries is that many of the players aren't like your dad. There are some serious ethical questions that arise when you think of lotteries are guaranteed to lose the vast majority of players a substantial amount of money: 1) If the state didn't run the lottery, who would? Would that money get funneled into public works if the state didn't run the lottery? 2) Is it ethical to market the lottery in order to create new players? 3) When the lottery is marketed (as it heavily is in many states), is it targeting vulnerable groups, like the poor? 4) Is playing the lottery an expression of hopelessness for some people? They know that their $5 is never going to multiply to $10 (the way it might for a wealthier person), so it's easier to risk that $5 for a chance to win $5 million.

xixi77 11y ago

Really, people should pause before calling behavior that does not conform to their model or their own preferences "irrational". The typical argument goes like "Expected monetary payoff is negative, therefore buying a lottery ticket an irrational decision" -- but this ignores, for example, the possibility of winning a life-changing prize, that would provide enjoyment far above and beyond what e.g. investing money spent on lottery would, and there is no reason why this possibility cannot compensate for the expected loss. Technically speaking, claims of irrationality implicitly rely on assumption of concavity of preferences, but there are good reasons to think that it's not always correct.

ryandrake 11y ago
Isn't the "Expected monetary payoff" of starting a company negative?
- welterde 11y ago
  It's not purely chance how well a company will do. And if you just consider the statistics I wouldn't have thought that the fraction of companies failing is that extreme for it to be negative in the expectation value (especially if you group it into different categories, etc.). Economically it sounds counter-intuitive to me as well.
Guvante 11y ago
Most of the complaints about people playing the lottery being irrational are about people spending huge amounts of money, not about playing the lottery at all. For instance the recent story of someone dumping their rent check into Powerball.

mandarlimaye 11y ago

We should abolish income tax and introduce mandatory lottery

rm_-rf_slash 11y ago
When I'm done laughing I'm going to take this suggestion to my college's economics and federal policy faculty...

transfire 11y ago

Lotteries are really a great wait for the state to collect taxes. Unfortunately the way the are currently handled results in too much profiteering/skimming/corruption.

aznpwnzor 11y ago

I don't see it as preying on the poor. I see it as a hobby / investment of the poor due to thousands of other factors that already prey on the poor. Imagine you have 0 chance of having any savings and barely staying ahead on your mortgage. The breakdown is this: upper class: easy access to what you want and need middle class: easy access to what you need lower class: difficult access to what you need If you are never going to have disposable income and forever be barely a paycheck ahead, what investments are available to you? You raise your child as well as you can for the school district and streets you live on, at best they go to a low-tier state school -> more debt. You can't retrain for a job because you are half a paycheck away from needing to take a second job. In this situation, the outcomes are this: don't play lottery -> 100% stay poor play lottery -> 99.99999% stay poor what do you choose?

diogenescynic 11y ago

The government runs lotteries because otherwise criminal organizations would. Now if only the US government would apply this same 'harm reduction' strategy to other 'crimes' like marijuana use.