The following are a couple of arguments for and against state lotteries. I often find that the best way to explore issues is to create arguments from the perspective of characters in my novel-writing. So that’s what I’ve done here. Neither BC nor RK are straight-line partisans, though they each have their histories and backstories. BC is coming from a more liberal perspective (particularly economics, he considers himself socially liberal but has a stubborn conservative streak on some issues). He comes from a Catholic, blue collar background, though he himself has gone to college and “made good”, so to speak, with a career in computers. RK comes from a thoroughly white-collar, WASP family. He went to law school, but is among those that had difficulty converting that into a sustainable legal career and instead works as a security/investigations consultant for a Pinkerton-like organization. He is a soft libertarian, but breaks to the right on some cultural issues.

The case against state lotteries (BC)

The role of a government in society is a subject of constant debate. Some believe that it is the role of society, through its government, to protect the least among us. Others believe that doing that interferes with the free market, which ultimately helps everybody or if not is otherwise more just. Whether we believe in the redistribution of wealth or not, one thing we should all agree on is that it should not be the business of the government to specifically target the poor and working classes for the benefit of the middle class and beyond. Ultimately, however, that’s precisely what lotteries do.

One of the jobs I had in college was working at a gas station and truck stop on the edge of town, right beside an industrial park. With the manufacturing sector struggling, I spent a lot of time serving people with generally poor economic prospects. Some of them worked in the industrial park, some stopped by just to go place to place in search for a job. Some worked part time. Some worked off the books for a meager income. One of my job functions was to cash checks. Often, very meager checks. Some days I would think that it is the responsibility of the government to help these people out. Other days I would think that the government already is often helping these people out and subsidizing self-destructive behavior. But even apart from the welfare quandary, the government already assists in their counterproductive behavior. Every Thursday and Friday, generally paydays, they would cash their checks and spend the first of their newfound money on three things: cigarettes, alcohol, and lottery tickets.

There aren’t any easy answers on what to do about cigarettes and alcohol. We could criminalize them, but that hasn’t really worked historically. We can tax them, but in addition to providing a (maybe needed) disincentive, it is also regressive. The end result isn’t that my patrons would buy less, but rather they would just end up spending that much more. But the third item – the lottery – is really extremely easy. Gambling is illegal in {BC’s home state}. While it still goes on, I’m sure, it’s made inconvenient enough that those that want to destroy their lives gambling will go to Las Vegas, Atlantic City, or Louisiana. The fact that they can instead gamble at any local convenience store creates demand. Markets tend to do that, and for some things (like the City of Las Vegas) perhaps it is the free market at work. But state run lotteries are not. They are run by the state. The enemy isn’t some marketing guru in a Vegas high-rise that has determined that if you add this smell and take away the windows and clocks people will piss away more and more of their income. It’s the state. It’s us.

Lotteries are popular because they are generally instituted to pay for things that people like, such as education. Others like it because it “taxes stupid.” But aren’t the stupid taxed enough already? Not in the literal sense, but they will live their lives stupid. I have no delusions that my former customers would be a-ok but for the state lottery. They were often alcoholics or worse. Some of them maybe just need a good job to get back on their feet, but others would screw it up even if they had it. Their position in life is the result of their screwups. Due, in large part, to the fact that they are stupid. They lack impulse control. The odds against winning the lottery as so high that they can’t even wrap their heads around the numbers. They are (usually) the products of our public school system. It is the height of irony that our system takes money from the ill-educated to put right back into the system that failed to educate them in the first place. But even if the system can’t educate them, their own limitations mean that they will likely live their lives without financial or physical security. They will never be able to afford the lifestyle of the smart. They’ll never be able to achieve it. They’ll never be able to plan for it. While it may give us satisfaction to tax this, we’re aiming our barrels at people that cannot really take care of themselves or we’re contributing to the decisions that make it so they will not. One way or another, the state will end up taking care of them anyway.

Whether gambling itself should be legal is a difficult question. But even if we agree that it should, it shouldn’t be the government doing it. The only reason we might want the government to do it is if we believe that they will do it more ethically. But they see the same dollar signs that private industry does. {BC’s home state} recently fiddled with the rules to make already long odds of winning even more long. Because they, like any good marketing company, recognize that sales go up as jackpots rise. And jackpots rise when people don’t win. So less winners equals more money. They’ve essentially discovered the same scent that Las Vegas casinos push through their vents.

The case for state lotteries (RK)

It’s a fact of life that very, very few of us will grow up to be rich. The more you redistribute income, the more you’re preventing people from becoming wealthy in the first place. The less you redistribute income, you’re supporting a status quo in which the wealthy get wealthier while the rest of us get by. Sure, there are people that find the magic formula to become the new rich, but that is exceedingly rare. It requires risks that few want to take. It requires smarts that few have. So you have those that already have money – and lots of it. You have those that have the smarts and gumption to risk it all to become rich. But that’s not most people. Most people just want enough money to get by and a savings to retire on. That’s hard enough. Making millions? That’s for other people. It may be a depressing thought, but it’s true.

Lotteries circumvent that. They provide a way for anybody with a dollar in their pocket to become wealthy. Almost none of them will, of course. The numbers are out there for everyone to see. And even the innumerate among us know that the odds are longer than we can possibly imagine. But as they say, you can’t win if you don’t play. And if you can’t win, you can’t dream of becoming a millionaire. When you buy a lottery ticket, you’re buying more the long odds at a jackpot. You’re buying a ticket to dream.

This is particularly true when it comes to the working class and below. Not only will these people never be wealthy, but they will probably never be comfortable. They’ll likely never have a comfortable retirement. They’ll probably always be living from one paycheck to the next. The lottery doesn’t change this. This is the way of the world. But the lottery provides them the ability to imagine a different life. A better one. We’re talking about a lot of people who don’t have anything to look forward to. Even if it’s almost entirely illusory (and even if winners lives don’t actually improve), the lottery is a little, quiet voice that says “it could happen to you.” It’s a reason to get up in the morning. It’s a form of entertainment. We spent all kinds of money watching people throw balls of various sizes and shapes around. That’s a game we have no stake in. If our team wins, we don’t materially benefit. There is no material benefit at all, no matter what happens.

If you look at the lottery in this way, it’s no less counterproductive productive than paying $3 to drink a beer so that you can watch the game on the bigscreen or spending $50 a month for cable so you can watch a game on TV. Most members of society have their basic material needs met. Even the losers who used to come to BC’s convenience store most likely had a roof over their heads and were (statistically) more likely to be overweight than not eating enough. So what do you do with the rest of that money? There’s really no right answer. But the lottery is, itself, not really the wrong one. I remember reading a comic strip once that said “Leo forgot to buy his lottery ticket, so he decided to play the home version” and shows him burning a $1. But isn’t it worth something to have that ticket in your pocket, to turn on the TV and watch the news for the winning numbers, and for some portion of the day to imagine how life could be if you won? But almost nobody expects to win. It’s all part of a carnival roller coaster. It’s living.

And if we’re going to allow for this sort of thing, then why not have the state do it? The state may be no more responsible than private industry (something “my side” has been saying for years). But it’s profits to the state that would otherwise go to someone else. And, though this argument doesn’t appeal all that much to me, if you’re concerned about gambling, it makes the state less likely to legalize it writ-large, because it would cut into the state’s profits. Allow people to bet on horse-races or drop their quarters in casinos, then they will will devote less money to the system that the state profits from. And given the short time horizon on horserace bets and slot machines (which don’t even make you pull down a lever anymore), you run the risk of the dumb population throwing a whole lot more money a whole lot more quickly with just about any major form of gambling than a daily lottery outside of the stock market.


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9 Responses to Lotteries: Pro & Con

  1. Peter says:

    If I go into a 7-11 and see a customer over age 65 or so, it’s a near-certainty that the customer will be buying lottery tickets.

  2. Escapist says:

    I generally agree with the conclusion that its entertainment for the ticket buyer (is it really more damaging than a Hollywood movie, complete with bad life advice, which costs more?), and if the state didn’t do it, you’d still have the “informal” sector providing it via “numbers rackets” and the like

  3. Mike Hunt says:

    RK: Allow people to bet on horse-races or drop their quarters in casinos, then they will will devote less money to the system that the state profits from.

    In states where horse racing and/or casinos are legal, the state gets to wet its beak as well. They don’t allow those operations to run just because they are nice guys…

  4. trumwill says:

    Sure, but it gets a slice rather than the entirety of the profits.

  5. Mike Hunt says:

    Sure, but it gets a slice rather than the entirety of the profits.

    I was shocked to learn that NJ makes MUCH more from its lottery than from its casinos. In the year ended June 30, 2010, the NJ Lottery contributed $924 million to the state treasury. This represents about one-third of the gross. The casinos, on the other hand, pay 8 percent of their win to the state, which works out to about $400 million.

  6. trumwill says:

    There’s a reason that every state, even Utah which revolves around a religion that disapproves of gambling, allows for lotteries while a lot shrug off gambling.

  7. Mike Hunt says:

    There’s a reason that every state, even Utah which revolves around a religion that disapproves of gambling, allows for lotteries while a lot shrug off gambling.

    According to Wikipedia, Utah is one of seven states with no lottery.

  8. trumwill says:

    I stand corrected! I thought they at least had Powerball.

  9. Mike Hunt says:

    Well Utah is the exception that proves the rule; it is SO religious that they can’t bring themselves to legalize the lottery. I remember reading that Utah has very draconian drinking laws as well.

    I had read once that Utah and Hawaii were the only states without legalized gambling of any sort. I guess Bingo isn’t a big fund raiser for the Mormon church…

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