Posts tagged with: lottery

Blog author: jballor
Wednesday, January 20, 2016
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The_Odds
In this week’s Acton Commentary, I take a look at “The Moral and Economic Poverty of the Lottery.” I take a look at the main parties involved: the winners, the players, and the government, and conclude, “Far from a force for good, lotteries are a danger to society.”

The problems with lotteries and gambling more generally are various and sundry. But Gerda Reith captures a fundamental aspect when she writes that “the state-sponsored fantasy of the big win turns the ethos of production and accumulation on its head.” This is essentially what Edmund Burke’s problem with a gaming society involves, which I explore in more depth in this week’s piece.

And later today I’ll be on Chris Brooks’ program on Moody Radio, “Equipped,” to discuss lottery winners and losers. Tune in at 1pm Eastern.

When it comes to government programs for redistributing income, nothing is quite as malevolently effective as state lotteries. Every year state lotteries redistribute the income of mostly poor Americans (who spend between 4-9 percent of their income on lottery tickets) to a handful of other citizens—and to the state’s coffers.

A prime example is the Powerball jackpot. The largest jackpot in U.S. history—now an estimated $700 million—will be available this Saturday. But even if someone wins this time around, millions of Americans will have lost.

The odds of winning were 1 in 175 million, which means that if every person in America had bought a ticket, only two would won. The chances of a single ticket holder winning the Powerball were only slightly higher than meeting a random stranger on the street who hands you a million dollars.

Yet despite the harm it does to our financially vulnerable neighbors, Christians—who are called to seek justice for the poor—often participate and encourage this activity. Even more disconcerting is that the state not only allows, but participates, in this exploitation.

In an article for the Ethics and Religious Liberty Commission, Jordan Ballor explains how lotteries allow the state to prey on the poor:
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7figuresAt The Atlantic, Derek Thompson provides some depressing numbers related to lotteries in America. Here are seven figures you should know from his article:

1. Americans spend more on lottery tickets than on sports tickets, books, video games, movie tickets, and recorded music sales combined — $70 billion on lotto games in 2014.

2. In five states, people spend more than $600 dollars per person per year on lottery tickets.

3. The poorest third of households buy half of all lotto tickets.

4. Winners of more than $600 are subject to 45 percent windfall taxes on their winnings.

5. Out of the 20 counties in North Carolina with poverty rates higher than 20 percent, 18 had lottery sales topping the statewide average of $200 per adult.

6. As recently as 1980, just 14 states held lotteries. Today it’s 43.

7. As recently as 2009, lotteries provided more revenue than state corporate-income taxes in 11 of the 43 states where they were legal.

save-to-winPeople who play the lottery with an income of less than $20,000 annually spent an average of $46 per month on lottery tickets. That comes out to more than $550 per year and it is nearly double the amount spent in any other income bracket.

Those who have the least spend an inordinate percentage of their income every year on lottery tickets (estimates vary from 4-9 percent). Yet while it is irrational for those in poverty to waste their limited resources on a one in 176 million chance, there is something almost rational in the reasoning for doing so. In 2012, The Atlantic’s Derek Thompson noted that,

For the desperately poor, lotteries perform a role not unlike the obverse of insurance. Rather than pay a small sum of money in exchange for the guarantee of protection that you’ll need in the future, you pay a small sum of money in exchange for the small probability that you’ll win money to help your lot right away. It is, for lack of a better term, a kind of aspirational insurance.

But what if the poor could pay a small sum to themselves (in the form of savings) and still reap the “aspirational insurance” benefits of the lottery? As the New York Times reports, some credit unions and non-profits are doing just that:
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In a prime example of how irony is lost on politicians, lawmakers in North Carolina are proposing to prohibit people receiving welfare from playing in the lottery.

lotteryPerhaps the legislators aren’t aware of what state lotteries are, in effect if not intent, designed to do: redistribute the income of mostly poor Americans to a handful of other citizens—and to the state’s coffers.

Nevertheless, the lawmaker’s moral intuitions seem to be leading them to good intentions. As Rep. Paul Stam says, “We’re giving them welfare to help them live, and yet by selling them a ticket, we’re taking away their money that is there to provide them the barest of necessities.”

Okay, so maybe the irony isn’t lost on every politician.

You might be wondering how they could actually implement such a ban since it’s not obvious who is on welfare. According the Christian Post, at present the proposals seek to ban lottery ticket merchants if they “knowingly” sell a lottery ticket to someone on welfare. So the lawmakers are hoping that cashiers and sellers would be able to recognize locals who use food stamps, and therefore should refuse to sell lottery tickets to those people.

In other words the government wants to punish business owners for helping facilitate government sponsored gambling to people on the government dole.

I have a better idea—not a good idea, mind you, just a better idea that the punish-the-innocent approach that the government wants to take.
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Blog author: jcarter
Thursday, November 29, 2012
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When it comes to government programs for redistributing income, nothing is quite as malevolently effective as state lotteries. Every year state lotteries redistribute the income of mostly poor Americans (who spend between 4-9% of their income on lottery tickets) to a handful of other citizens—and to the state’s coffers.

A prime example is yesterday’s Powerball jackpot. Two people became instant multimillionaires from a voluntary transfer of wealth from their fellow citizens. The money came from the 563 million tickets that were sold, as the old adage says, to those who are bad at math.

The odds of winning were 1 in 175 million, which means that if every person in America had bought a ticket, only two would have won. The chances of a single ticket holder winning the Powerball were only slightly higher than meeting a random stranger on the street who hands you a million dollars.

Yet despite the harm it does to our financially vulnerable neighbors, Christians—who are called to seek justice for the poor—often participate and encourage this activity. Even more disconcerting is that the state not only allows, but participates, in this exploitation. Jordan Ballor explains how lotteries allow the state to prey on the poor:
(more…)

Whether the lottery is, as the old adage states, a tax on people who are bad at math, it is most certainly a tax on the poor. Those who have the least spend an inordinate percentage of their income every year on lottery tickets (estimates vary from 4-9%). Yet while it is irrational for those in poverty to waste their limited resources on a one in 176 million chance, there is something almost rational in the reasoning for doing so. As The Atlantic’s Derek Thompson points out:
(more…)