Promotions unnecessarily lure players to state ‘lootery’
I soured on the lottery about four years ago. That was back before Texas took the plunge. I was living in Connecticut at the time, a different world for a South Texas native, working for a chain of newspapers along the coast.
One day as I was standing in line at a small grocery market, I noticed an elderly woman ahead of me with a meager offering of groceries. I assumed from her pauper-like appearance that she was of less than substantial means. As the cashier rang her up, she glanced into her purse and suddenly looked up startled. Stopping the cashier, she picked up a package of meat and asked to take it back so she could buy her daily allotment of lottery tickets.
I couldn’t believe it! This woman was taking food off of her table so she could purchase some worthless lottery tickets. I was beside myself with outrage and disgust, so I decided to look into the matter more thoroughly.
As it turns out, Connecticut was making a killing on lottery tickets that year, raking in an estimated $525 million. That’s a lot of money to squeeze out of a little bitty state like Connecticut. Texas lottery officials are boasting about bringing in $927 million in lottery revenues last year and that from a state with a population four and a half times the size of Connecticut.
Mind you, this was going on in the midst of a really bad recession in the Northeast. Despite having approximately 40 percent of this mountain cash flowing directly into the state treasury, Connecticut was still struggling to make ends meet and was faced with the biggest budget deficit in its history. Obviously the lottery, which had been around for 18 years there, was not the cure all for the state’s fiscal woes.
Could it be, I wondered, that the lottery was more of a drain on the state’s economy than a benefit? People were struggling with massive layoffs, unemployment, low wages and high cost of living; and yet they were spending more on lottery tickets than ever before.
Where does all of this money come from anyway? Well, it’s not appearing out of thin air. In many cases, like the example above, it’s coming straight off the tables of people who can’t afford it. It is also the discretionary income of thousands of working class and middle income people who might have found better and more productive things to do with it. The lottery does not create wealth, it just soaks up whatever is already out there and redistributes about half to a very small group of people.
The money spent on lottery tickets might otherwise have gone towards a night out at the movies, a meal at a nice restaurant, some new clothes, a family vacation, savings for a child’s education and so on. In other words, it is money that could have been reinvested in the community to support local businesses or put into savings which helps banks make loans to new businesses and to people buying new homes.
Instead it is money that is being frittered away on one of the oldest con games known to man. Any professional gambler could tell you that the lottery has the worst odds of any form of gambling ever devised. Your odds of being killed in an automobile accident tomorrow are much better than your chances of winning the big Lotto jackpot. Think about it.
But it is not my place to tell people how to spend their money. And I know that some people would even argue that playing the lottery is worth losing their money on because of the enjoyment they get from those few moments of anticipation as they scratch their numbers or listen to the winning numbers on the nightly news. It reminds me of the time when I was a youth buying packages of baseball cards at the concession stand during Little League games. You could never tell if that next pack of cards might be the one containing the Johnny Bench or Pete Rose cards that I so highly valued.
So my gripe is not with the people that play the lottery. My frustration is with the state government which has decided to tap into people’s weaknesses for this type of entertainment to make some easy money for the state coffers. Silly me, I was naive enough to think that the government was supposed to protect people from being taken advantage of like this. Instead, the government is spending millions of dollars a year ($34 million this past year) on advertising and promotion to entice people to gamble their hard-earned money away.
Oh sure, it raises money for the government, some of which can be used for good things like education. (The ‘profits’ are added to the general fund and not applied to any particular budget item). But if the lottery is to serve as a new form of taxation, we should judge it accordingly and recognize that it is extremely regressive and inefficient. It is regressive because the people who play most frequently tend to be poor and less educated. It is inefficient because less than 40 percent of every dollar collected makes it into the state treasury, unlike most other taxes where it costs less than 2 percent to collect and administer and 98 percent ends up in the treasury.
So here in a nutshell is what I would like to see done. Let the government continue to run a lottery for those people who choose to play, but eliminate all advertising and promotion so as not to entice people into playing who otherwise would not. If that means that ticket sales decline, then all the better. Taxes that are needed should be collected in a fair and efficient manner, otherwise leave people alone to pursue more productive interests with their income.
Wednesday, October 08, 2008
What’s Left? Part III
This column was published on Aug. 3, 1995