Lotteries: America's $70B Shame | Hacker News Reader

Lotteries: America's $70B Shame

theatlantic.com

78 pointssamsolomon31 comments

My mother used to bring me to a United Church every Sunday when I was growing up. The United Church does not accept proceeds from gambling. As this obviously contradicted my parents buying lottery tickets and the famous Catholic Church bingo events, I asked our minister why. He said, "It is because those who gamble the most can afford it the least." I've never found gambling interesting or exciting, but over 2 decades later and I am certain it is true.

A small anecdote that shines a light on the core of lotteries.

Very nice.

A few thoughts:

1. Even if it were illegal, many people would still play the lotteries: https://en.wikipedia.org/wiki/Numbers_game , only the profit would go to criminals.

2. The "Sin Tax" ( https://en.wikipedia.org/wiki/Sin_tax ) on lotteries, like all sin taxes (i.e. cigarettes, alcohol), is highly regressive and hostile to the poor.

That's an interesting point, though it's hard to imagine the total market cap would be anywhere near as large if lotteries weren't available in every corner store/gas station/etc.

If you had to directly seek it out as a black market activity, the outflow of capital from from the poor and working class would be diminished, but even if that were two orders of magnitude less, that's 70M/year flowing to organized crime.

Not sure how to feel about this, since it seems immoral for the government to implement a de-factor regressive tax scheme, but your point stands.

So maybe a hybrid approach would be to keep them legal and monopolized by the state but simultaneously run PSA and adverts as well as emblazon labels on the tickets about the ills they visit upon the buyers.

And so a successful lottery organization would be one which eventually drove itself out of business.

Or just take a smaller cut and spread the winnings thinner so that the expected value is closer to the actual spending. Change it so that they have to be scratched to win (instead of buying and scanning), or institute other limiting factors.

You can also adjust the odds to mostly pay people their money back, keeping only enough to pay for the administration of the games themselves.

I've been purchasing a lotto ticket every week for a decade at least. At some point I realized I wasn't playing to win a much as I was playing for the entertainment value (Actually I discovered this when I realized I had a years worth of unchecked tickets in my drawer and needed to check them before they expired.)

Really... If buying a ticket lets you take a break and day dream 'what if' scenarios then it's not only a de-stressor it also gets you to think outside-the-box and discover ideas that do help you in practical ways. I'd say my un-won tickets turned out to be a better investment than many other comparable expenditures, like for example drinking fucking pop.

This. Lotteries are "The Tax that's Fun to Pay."

I would love to see the Federal Government get into this game. Specifically, everyone who files a tax return gets a ticket to the national lottery. File early? Get two! Low income household? Get 3!

Income re-distribution and increased tax revenue in one shot.

Not a tax return, but in Brasil and Portugal, you get a lottery ticket for submitting receipts of purchases (all businesses are required to submit them, the lottery is a way to catch infringers). The Portuguese IRS is giving out a luxury car every week: http://www.ft.com/cms/s/0/30834f5a-919f-11e3-8fb3-00144feab7...

90% of visitors at Vegas lose money. 70% leave happy.

OTOH I still daydream about getting rich even without gambling.

The article covers this. Nothing wrong with the fact that you get that kind of entertainment out of it. But the poorer you are, the more likely you are to play, and the more likely you are to play for money instead of for fun.

Sure, these people are being irrational, but that's not a good reason to take advantage of them.

I don't play the lottery for expected value, I play it for variance. No other "investment" comes even close. So, spending $1 of investment on that buys a lot of potential upside.

With you on that. Have never understood the incredulous stance some people take on the very concept of buying a lottery ticket ("tax on stupid" etc).

Addiction and/or spending-money-one-doesn't-have are separate matters from the legitimacy of the game.

If I buy a ticket, it's not for the expected value, it's for the dream. A couple bucks isn't bad for an excuse to dream. (I also only play a couple times s year.)

It's okay to be an irrational human, we all are! Let's not pretend it's anything but irrationality (from a financial point of view), though. Your buy-in being only a dollar doesn't make it less of a waste of money.

The reasoning behind why lotteries can be damaging to the socioeconomically disadvantaged is similar to that of alcohol, tobacco, and other drugs. It offers an escape and "hope", as some have put it for the lottery, but there is almost an infinitesimally small chance that something good will come out of it.

The problem with this is not people playing the lottery in general (even if it is objectively throwing away money). I've even bought into the office pool a few times more as "social insurance" than anything else. The problem IS that the lottery takes advantage of those who need that marginal dollar the most under the pretense of funding state education, which, according to John Oliver, doesn't even seem to be true[1].

[1] https://www.youtube.com/watch?v=9PK-netuhHA

For hundreds of years, one of the primary motivations of social policy seems to have been depriving the poor and politically-weak of their small pleasures. There are other motivations too, but nearly everything that has been done to and for the disenfranchised can be summarized thus, so it seems a parsimonious explanation.

It would be interesting to see the actual distributions instead of just averages.

Demographics would also be interesting (although I doubt they have this data); is the spending really dominated by a wide poor base, or is it dominated by a few middle class "whales"? Especially in the smaller states, where the per capita average is much higher, I suspect that there are some middle class outliers.

Overall the demographic is similar to slot machines and cigarettes. Older people play 3/4 draw numbers, younger folks do scratch off games.

Lotteries don't scale up well to "scratch" the gambling itch that rich people have. You have to buy at retail, and the quantities are setup for casual play or hard cases only.

A guy in a suit dropping $500 on tickets at the gas station is going to draw negative attention. Dropping $500 on the craps table makes you feel like a big shot.

What the article doesn't address is what a lottery ticket might give people: hope. And that's what you might need to get up the next day when you are poor. That said, targeting poor neighborhoods to extract more money from them does seem shameful.

Hope is an optimistic word for this. I think it would be more accurate to say idle thrill. Passive daydreaming about going from nothing to millions overnight (due to external factors you can't even influence except by buying a ticket) doesn't really count as 'hope' in my view. It's a bit like saying drinking helps people to avoid problems. I mean, technically it does...

Since the market economy is supposed to search for Pareto optimality (local optima) why not view the lottery as a way to find a better global optima by randomly kicking the system out of its local optima. Similar to how annealing [1] uses random jumps.

[1] https://en.m.wikipedia.org/wiki/Simulated_annealing

...but sports book regulation is noxious government interference.

Maybe it's just me, but I never got the attitude a lot of people have here. I mean, is playing the lottery a foolish decision? Sure, but for the most part it's pretty cheap, and offers the smallest amount of hope for something better. More than you can say about a lot of other alternatives...

People know they're (most likely) not going to win. It's just a bit of fun, and slightly less awkward than having to got to a casino.

And I never understood the "fun" part. It's "fun" for the 10 seconds it takes to check the numbers, maybe. You'd get a lot more entertainment taking 10 singles and tossing them over a railing at the mall and watching the resulting show.

This made my night. That is exactly how I feel. I just spit out my drink reading this comment. Id rather just go give random people a dollar sand see their reaction.

Lotteries, and these distributions of lotto spending, aren't a problem. They're a symptom of a larger problem in the cultural divide between socioeconomic and racial classes from which a significant amount of this country's problems can be tracked back to.

This is ironic, people think they're being selfish but in actuality they're being servile.

I always considered the lottery a tax on irrationality.

It's a tax on people who are bad at statistics.

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