Gambling - Lotteries
by: Jerry Price - Sep 1, 2006 - comment
Many people dream of winning the lottery, thinking that it will make their life so much easier. But that may not be true, especially if those who win the big bucks continue to live as they have and keep the same attitudes. That’s the opinion of Richard Nelson, a policy analyst with The Family Foundation of Kentucky.
Nelson says “the problem with winning the lottery is the big principle behind it—that is, the idea of rewarding someone with something for which they neither saved nor worked. Equally problematic, he contends, is the government’s principle of endorsing state prosperity at the expense of people who are losing money or possibly developing a potentially devastating addiction.
“Neither principle is a good one, Nelson asserts, and he believes even those who manage to ‘beat the house’ and gain a luxurious lifestyle through lottery winnings may be unlikely to profit in the long run. That is because those winnings represent ‘money that they did not earn, that they did not work hard to get,’ he says, ‘and just as easily as they have obtained that money, that money will leave their hands just as quickly’ … Receiving a large sum of money, unearned, without knowing how to properly value it or manage it can usher in all kinds of problems, says the family advocate—from figuring out how not to avoid the ‘easy come, easy go’ pattern to fending off friends and family who want a piece of the action.”
Adapted from Ed Thomas, Winning the Lottery Could Prove a Losing Proposition, Analyst Says (AgapePress), March 27, 2006
There are lots of ways to spend money unwisely. But perhaps the dumbest is buying lottery tickets, hoping to get rich. There are many different lottery games including Powerball and Mega Millions. And with their huge sums of money as prizes, many are falling victim to the “get rich quick scheme” of buying a ticket and retiring in luxury. But consider the odds. According to mathematicians like Douglas Arnold, director of the Institute for Mathematics and its Applications at the University of Minnesota, the chance of winning the Powerball jackpot is 1 in 146 million (that’s 146,000,000). The odds of winning the Mega Millions prize are 1 in 175 million. The odds of dying of snake bite are only 1 in 96 million. A person is five times more likely to be killed in an automobile crash on the way to buy a lottery ticket than he is of winning the lottery.
Gregory Karp, “Don’t Gamble Your Future on the Lottery,” The Morning Call (Allentown, PA), December 4, 2005
Massachusetts began its state operated lottery on March 22, 1972. In 2005, the state ranked number one in per capita spending on lottery tickets at $681 per person. Critics say that low- and moderate-income residents will go further into debt, causing more social problems.
Last year, Massachusetts took in $935 million in lottery profits while Nevada had revenues of $886 million from its casinos. Massachusetts had 3,900 lottery agents in 1981; in 2005, there were 7,500. Those agents are more prevalent in the poorer communities. Lowell has a lottery agent for every 876 residents while Weston has one for every 5,734 residents.
Like many other states, a large part of the state budget in Massachusetts is gambling money. What happens over time is that the state itself becomes addicted to the gambling money, relying on it instead of taxation. Even State Treasurer Timothy Cahill, whose office runs the Lottery, said, “I am concerned that we have become too reliant on scratch tickets as a revenue source.” State Representative Daniel Bosley said, “Any time you build part of your budget on gambling, it’s a mistake. Once you have it, you rely on it.”
Erik Arvidson, “Lottery Rakes in Cash for State—but At Whose Expense?” Lowell Sun (Lowell, MA), September 26, 2005
Several states, including Illinois, Georgia, and North Dakota, are exploring the idea of Web-based lottery games—even though the U.S. Justice Department insists that all forms of online gambling are illegal. Anthony Cabot, an attorney in Nevada who specializes in gambling law, says that online lotteries are the “last great opportunity for substantial revenue increases” and, in his opinion, there is nothing to prevent it from happening in spite of the Justice Department’s position.
Those advocating an online lottery believe they have three advantages: (1) they appeal to those who rarely shop at convenience stores where most tickets are sold, (2) they reduce retail cost, and (3) they make it possible to identify who is playing the games so that loyalty programs and other products can be marketed to them.
What seems to be the bottom line is the identification and cultivation of new gamblers—those who would never go into a convenience store and buy a ticket but who might do so in the privacy of their own home via the Internet—a move that only spells more addiction for a broader base of people.
Bruce Mohl, “State Lotteries on the Web? Bet On It,” The Boston Globe, February 13, 2006
Think all that money generated by state-operated lotteries that were sold to the public as providers of money for education actually goes to education? Ask Art Johnson of the Palm Beach County School District in Florida. Ask Bob Scott of the Avon Lake School District in Ohio. Ask Carl McCall, former state comptroller for the state of New York. All of them point to the fact that the money that once was used for education is not supplemented by the lottery revenues—they are mostly replaced by them so the money can be used elsewhere. Says Scott, “The money comes in (from the lottery), but the legislature can just take it right out on the other side.” Johnson says, when asked about lottery funding for education, “I’m unimpressed.” MaCall, in a letter accompanying an audit of state spending of lottery money in New York, called education support from the lottery “a myth.”
Mark Binker, “Numbers Game May Not Add Up,” News & Record (Greensboro, NC), December 25, 2005
Further Learning
Learn more about: Family, Addictions, Gambling