I'm pretty sure we let the government run the lotteries here in the US because it's a lot better than when the gangs would run them. It's much the same argument for drug legalization, really... if people are going to be stupid, and you know they're going to be stupid, at least help them be smart about being stupid.
I would never think of playing the lottery or engaging in any other form of gambling because I understand the odds are always in favor of the house. I understand that I'm going to lose money. What a terrible irony that we fund public education with a lottery that relies on participation by those who don't understand basic math?
But I see this as part of a larger trend of preying on the poor. Watching far-right media, I see poor people being told to invest heavily in gold, reverse mortgages, guns, and raging them up into sending all their money to political organizations whose sole purpose is to take money from the angry. And there are plenty of examples on the left as well (people investing in college degrees for the sake of college degrees without any idea if their field of study is a good investment or not). I don't know how we break these cycles and inspire low-income American citizens to temper their emotions and rationally invest in their futures.
Then neither does buying a movie ticket make sense. Of course it doesn't make sense if you frame it as an investment. But people don't necessarily buy lottery tickets expecting to win and more than you or I sit down at a slot machine expecting to walk away with more money than we arrived with. They buy them as entertainment or a reason to hope or dream for a few days.
walshemj's comment was clearly referring to cases where the expected profit of a lottery ticket is positive ("pot odds are such it does make sense to bet on the lottery"). I'm working from walshemj's assumptions about how risk and benefit should be measured, which is in terms of monetary value.
Not really. The lottery is split up among the winners. When there is a big pot, you get proportionally more people playing the lotto. So, the expected payout to one individual actually drops as the payout rises.
I was going to make a similar comment (i.e. lotteries are a tax on people who are bad at math) but I don't think that's entirely the case. My feeling is that it's more about desperation than calculation.
While I agree it does prey on tne poor, I don't agree that they don't necessarily understand basic math. While the expected value of a lottery ticket may be worth less than the cost to purchase, it still might make sense to purchase.
A lottery is a better investment than other crap the poor often buy. Crack, TVs, xboxes, alcohol all have a EROI of 0. A lottery at least is >0 . Better would be if we sold partials of VT(I) in the store at lottery ticket prices. $2 for a near 0 chance at 1B, or $2 for a near 100% chance at $4 given enough time.
This is a sad truth that's a lot less flashy of a headline, so it's not surprising it's not covered. You're unlikely to see an article with the title: "People who buy stupid shit they don't need and can't afford shocked to find they are still broke".
Much easier to blame the lottery. Yes, poorer people like to buy lottery tickets. They want a chance to rise up and be rich, and there's really no other way most of them can ever do that.
Ask someone if they would sell their TV to buy lottery tickets. They'll say no, because a TV delivers lots of entertainment value.
Lotteries don't. Calling them entertainment is just an excuse for scamming money out of people. Calling them investment is just trying to confuse things.
This issue boils down to the proper function of government: ensure people's freedom to act as they wish (barring negative impact on others), or enforce the "healthiest" behavior?
Yes, buying lottery tickets for any reason other than entertainment is irrational. But does that mean it shouldn't be allowed? People are choosing to spend their money like this.
Personally, I prefer a government that lets people do stupid things -- e.g. buying a lottery ticket with the expectation of winning -- to a government that paternalistically enforces middle-class norms.
Ummm what happens when you apply your argument to allowing them to spend it on alcohol or cigarettes or a car or a thousand other things? This is a flawed argument my friend. No one group has a right to enforce their social, moral, economic or other ideology on another group based on what the enforcing group thinks is "right". That's a slippery slope with extra grease on it.
I guess it's hard for some people to relate to a large portion of any future savings being 'invested' in lottery tickets ("the money just goes towards your college education either way!") and spent on cigarettes -- not that hard at all when it's been your reality.
Well then the government should create laws allowing it to dictate what you can spend your money on if you make less than $X per year. You know, to prevent social consequences.
In your line of reasoning, should we perhaps also introduce mandatory drug testing for people with low income, and prohibit them from buying alcohol and cigarettes? Surely, these purchases have more social consequences than lottery tickets.
This concept of "social consequences" is essentially a flipped framing of a situation to incorporate an implicit utility function of whomever is using the term.
If a person or group of people does not act in a way that benefits you, they still have not harmed you. It simply means they have not chosen to conform to your expectations.
Different methods of governing can basically all boil down to a simple balance scale:
On one side you have the rights of the individual and on the other side you have the rights of the community.
Some people tend to lean the scale toward individual rights and others toward community rights.
Smaller government tends to handle the balance by staying out of the way until it's necessary that they step in. Bigger government tends to handle the balance by marking clear (or blurry) lines and moving them when necessary.
One could make the argument that there's a difference between letting people do stupid things that only indirectly and only in certain contexts hurt others (ex spending the rent money on lottery tickets) and letting people do stupid things that by definition hurt others (shooting up a school, smoking in public and populated places) or have a significant liklihood of harming others (driving drunk).
Of course this is always an awkward line to walk, and the definition of stupid is entirely subjective. Most things that make people happy aren't totally "rational".
You completely ignored the bit where they said that the government's there to prevent negative externalities, like shootings, etc.
To say that the government's job is to prevent us from making stupid choices is absurd. At that point, you may as well make cheeseburgers and fries illegal, and tax whole milk. `
Spend some more time around casinos. Watch your opinion change as you realize what depressing things it says about our society that we let people weep on the pavement because they've lost their house on a literal crapshoot.
Spending a good bit of my formative years in Biloxi seriously changed my attitude around all of this.
The degree to which the casino industry in Biloxi is celebrated as a heroic engine of economic development and generosity depresses me. The Coast was no utopia before the casinos. And sure, yeah, the casinos employ a bunch of people and some tax money goes to local schools.
But seeing people - often poor people - gamble away their lives, seeing how much prostitution came into play, seeing how many hard drugs come in through them...I don't think the price was worth it.
But all you'll see in the local paper, and hear from most locals, is laudatory: casinos are the savior. We need more of them!
I think we could make a distinction between allowing people to make those types of decisions and actively enabling and encouraging those types of decisions.
If you want to gamble your house away in a private bet, go for it, but the local government shouldn't move heaven and earth to get a casino built to enable thousands and thousands of people to make those decisions in the name of tax revenue.
Similarly, I don't think you would be taking away people's freedom in any meaningful way if, say, you limited lottery transactions to say, $20.
I think you're tilting at windmills here. The type of people who think gambling should be legal and is entirely a personal decision are the type that would agree with you.
Only take it a step further. The state shouldn't move heaven and earth to get anything privately owned built. That it's a casino only makes something inherently bad even worse.
As a Christian, I disagree with the lifestyles many lead, and I have seen those lifestyles lead to much suffering. But just because I think I know better doesn't mean I want to push my views on them. God gave us free will; I advocate free will. Timshel.
I've spent a lot of time around casinos, and I've never seen any legitimate reason to restrict gambling. The government certainly has a role in making sure the games are as advertised, but you can't have liberty without allowing people to screw up.
except that I’m not sure that the counter-argument to "act-as-you-wish" is "enforcing healthy behavior."
The nail in the coffin of the tobacco industry wasn’t “cigarettes are unhealthy,” it was that the tobacco industry was actively deceiving the public and obfuscating scientific research over multiple generations.
(When the sugar industry follows step (this seems inevitable), it will because they failed to police themselves with candid acknowledgement that soda should be a treat and not a dietary staple. Perhaps the Bloomberg soda ban was a bad idea and heavy-handed mommy gov't etc, but if the soda companies had an iota of sense they would have pre-empted the whole mess.)
So getting back to lottery… let’s agree that it is okay for people to act as they wish, but is it acceptable for lottery to misrepresent the astronomically low chances of even breaking even? Is it acceptable for lottery to specifically market toward people who can least afford it?
There's a reason the New York State lottery motto is "Hey, you never know."
You could enforce monthly purchase limits based on income, you could require an accurate demonstration of statistics on every ticket, you could raise taxes and double ticket prices, all sorts of things that would get the primary market - people who buy tickets and really can't afford it - to buy less, but...
Regardless of how you feel about the function of government, the government itself shouldn't be party to running a lottery. Tax private lotteries, outlaw them, don't tax them, whatever, but the government stepping in and running lotteries is a massive overstep.
"When you play the lottery, sometimes you win and sometimes you lose. But it's better than using drugs or alcohol because when you use drugs or alcohol, you always lose" - "American Movie"
People who don't play the lottery are always so quick to dismiss it. They disregard how accessible it is - you don't need a next-gen console or flat-screen tv, just cash - as they disregard how independently fun it is - you could be sitting alone in a dark room with nothing but a lottery ticket in your hand and be perfectly satisfied with fantasies of winning. It's like discussing guns with people who will never use them.
Let's not get too carried away by sensationalism and look at this from a bird's-eye view: lotteries are great sources of revenue (better than state corporate income taxes? Holy cow!), they are low-health-risk (someone may need treatment for gambling addiction but it never hurts their lungs or livers), and they are easy to scale up and down.
If the regressive-tax-on-the-poor argument is too convincing for you to resist, then here's a solution: register lottery purchases so you can only buy $X in lottery tickets based on your $Y income. Just don't come crying to me when the state comes for your income and property taxes to make up the difference...
> Earlier this month the Gambling Commission, the industry regulator, fined Coral bookmakers £90,000 in profits it made from one drug dealer who had laundered almost £1m in its shops. Last month the industry regulator also publicly admitted what has long been privately acknowledged: FOBTs present a "high inherent money-laundering risk".
The machines take £200 at a time. This would have been mostly in £10 and £20 notes. It's not clear from the article if the launderer put the whole £1m through the machines, or "just" £90k.
> Dealers feed their drug money through the machines, losing a little and then cashing out with the vast majority of their stake, James says. They can then collect a printed ticket showing they have gambled that day – meaning that if stopped by police, they can answer questions about why an apparently unemployed young man carries hundreds of pounds in rolled-up cash.
> It's like discussing guns with people who will never use them.
You mean that it also creates a toxic culture which disproportionally hurts poor people and minorities? Agreed!
> lotteries are great sources of revenue (better than state corporate income taxes? Holy cow!)
They're only so because the US has this inmensely powerful anti-tax culture and lobbies. Plus, lotteries take money from the poor, which means they're aggravating the very problems we use taxes to solve.
> they are low-health-risk (someone may need treatment for gambling addiction but it never hurts their lungs or livers)
Mental health issues are health issues. Gambling addiction is not a low health risk.
> Just don't come crying to me when the state comes for your income and property taxes to make up the difference...
They should! They should come for my income and for my property
taxes, and even more so for the income and property taxes of those who are richer than me. Taking money from the poor to fund the services that poor people need is obviously counter-productive.
Face it: you or anyone else isn't gonna get poor people to stop playing the lottery any more than corporations are gonna stop getting cozy tax breaks, or getting people who make decent money to campaign for it to be taxed more.
So the question I ask is: what is an acceptable compromise? Without a lottery, how much tax revenue are you going to need to make up the difference? How high can taxes be raised before people and corporations decide to move to the next state over, or even leave the country?
Taxes, lotteries, vices, addictions, weapons, they'll always be a part of our society and we shouldn't delude ourselves into thinking things we don't like can simply be deleted. So, where do you draw the lines, and where do you compromise?
"you could be sitting alone in a dark room with nothing but a lottery ticket in your hand and be perfectly satisfied with fantasies of winning"
This is one of the biggest reasons I dislike the lottery, from a societal perspective: it satisfies people who would otherwise have an incentive to go out and create their own success. You can see this anytime the jackpots get big enough that non-players buy tickets. There is a noticeable drop in productivity as people sit back and fantasize about winning $1 billion or more. Instead of actually doing something that would improve their lives, they're happy sitting in the dark and fantasizing. If that's a one-day a year occurrence, fine. But its clearly not a one-day occurrence to the regular players, and I think it negatively impacts their lives far beyond the actual cost of the tickets.
Change a few words and you could be talking about masturbation. Do you only masturbate "one-day a year"?
It's worth noting that, historically, haranguing people on values without sufficiently addressing their incentive network often does little to change them.
Let's assume you're right, and that many poor people have no opportunity to better their situation. That doesn't change the fact that some people absolutely do have the opportunity to better their situation, but choose not to because their desire for a better future is satisfied by the fantasy of winning the lottery. The lottery acts as a drain in these cases, not only on the individuals who continue to stagnate, but to the rest of us who would benefit from those individuals contributions.
I'll also note that I fundamentally disagree with your statement. Everyone has an opportunity to create their own success. Obviously not everyone has the same kinds of opportunities or the same number of opportunities. Those of us with enough time to comment on Hacker News probably have dozens of opportunities PER DAY to create our own success, whereas a poor black kid from Baltimore may only have one, and it may require him to wake up at 4am to go to work or stay up till midnight to educate himself. But those opportunities still exist, even if you're poor.
>This is one of the biggest reasons I dislike the lottery, from a societal perspective: it satisfies people who would otherwise have an incentive to go out and create their own success.
They could do that, but would they? They might just spend the money on beer or drugs.
>According to the North American Association of State and Provincial Lotteries, lotteries took in $70.1 billion in sales in the 2014 fiscal year. That’s more than Americans in all 50 states spent on sports tickets, books, video games, movie tickets, and recorded music sales.
One should be careful when making this sort of comparison-- at least from the standpoint of the overall economy. The cost of "producing the lottery" is more or less fixed relative to its revenue, i.e. its marginal cost is free, but it's not necessarily free for the other good they're comparing it to. For consumers to increase the number of movie tickets they buy or books they buy, more theaters have to be built or books have to be printed. The cost of producing the extra consumption goods is relevant, precisely because there is nearly zero cost of producing the consumer good that is a lotto ticket.
In other words, money is changing hands (mainly from the poor people's hands into the government's and from there who knows), but resources are not being consumed like they would be if we were constructing new movie theaters all over town. That particular aspect of the lottery is actually praiseworthy and might be missed by a simple comparison of consumer spending on it vs "all these other forms of entertainment combined".
As I said elsewhere, it takes nothing more than a printer with ink and paper. No terminals, no coin-collectors, nothing else. We shouldn't antagonize a ruthlessly efficient method of revenue because people make bad decisions.
Whether it's killing a man or providing jobs to miners, the dynamite doesn't care.
The poor do a lot of dumb things: They don't track their money, they rack up credit card debt, they don't plan to minimize taxes, they depend on payday loans and check cashing services, they drink and smoke and do drugs, they constantly overdraft their bank accounts, they spend too much on entertainment, etc. The middle class are better with this, mainly because they have more money and so are less likely to be fined for non-payment.
I know some family approaching 60 who are still paying off the house, 2 cars, and an RV. If that wasn't bad enough, they play the lottery every week because "somebody has to win".
I still think we should abolish social security, but after seeing countless examples of people racking up debt buying stuff they don't need and then depending on it in old age to avoid starving, it's almost enough to make me think it has some merit.
I feel like that entire line of thought with government-enforced retirement accounts leads to increasing taxes on the poor since they can't be trusted to responsibly spend it. Which actually might be what a lottery is.
For me lotteries is one of the reason, I have grown skeptical of State.
1. They Lie, Lie about funding schools and lottery is the only way to do it.
2. Lie about the Prize money, the advertisements of lottery are untruthful and a private entity would be charged with fraud.
3. The practice of gaming the game, i.e. they try to make lotteries popular and sink a lot of money for advertising, they claim 50% goes for prizes but of the remaining 50% a lot goes to advertising than going to schools.
4. Taxing the winning, splitting the wins. Even if you win, you will be short-charged depending on the number of winners.
5. Exclude non-State entities from having their own lotteries, State monopoly.
6. Corporate tax cuts are pretty much common in states that aggressively promote lottery, lotto and video poker.
Even if it is entertainment, which it is not, Government should not be in it. I am not against lotteries, they need to competitive and have should have a level transparency, that is currently lacking since the law makers are the law breakers.
Just because you don't find it entertaining does not mean it's not entertainment.
I'm not necessarily disagreeing with your other points, but gambling of all types is most certainly an entertainment product, regardless of its tendency to create addiction, etc.
I agree that government should step out of it and all gambling with published, vetted by an independent authority and fully transparent procedurally gambling models should be legal for private industry to pursue. Let government tax them like they do alcohol and tobacco.
My father once won $100,000 from a scratch off ticket. It was a $20.00 scratch off ticket. I gave him crap for years over it because between playing Keno, and buying other scratch offs, he's probably spent close to that trying to recreate the effect.
The thing is, he's very serious about his lottery. He enters every losing ticket into a second chance registration on Maryland's lottery site. (This was how I got him to start using the internet, actually) He won a few times and knows what he's losing. He's not bad at math. He's not rich either, he lives off of a very small military pension and has a job filling vending machines on a route.
I've pressed him again and again about how stupid the lottery is. I've pointed out the math, the bad odds, the addictive design of the games.. you name it. His answer remains the same. A shrug and "It's fun." I have since realized after spending afternoons with him at the places he likes to play, that it's his own odd social network. He knows all the employees, the other regulars. He complains about politics to the other players. He sweet talks the old ladies behind the counter. It's his excuse to leave the house. He keeps making his mortgage payments, keeps making his wife dinner every night, and takes care of his mother. If he wants to blow his fun-money on lottery at this point, I've just quit arguing with him and I go play with him when I visit. Losing 40 bucks to spend the afternoon with my old man is a bargain, in my eyes.
I'm not surprised that there are anecdotes of people who play in a (mostly) harmless way. One question I have is whether there might be another way for your dad to have an equally fulfilling amount of fun without losing as much money. It would depend on the individual, obviously.
The problem with lotteries is that many of the players aren't like your dad. There are some serious ethical questions that arise when you think of lotteries are guaranteed to lose the vast majority of players a substantial amount of money:
1) If the state didn't run the lottery, who would? Would that money get funneled into public works if the state didn't run the lottery?
2) Is it ethical to market the lottery in order to create new players?
3) When the lottery is marketed (as it heavily is in many states), is it targeting vulnerable groups, like the poor?
4) Is playing the lottery an expression of hopelessness for some people? They know that their $5 is never going to multiply to $10 (the way it might for a wealthier person), so it's easier to risk that $5 for a chance to win $5 million.
> 4) Is playing the lottery an expression of hopelessness for some people? They know that their $5 is never going to multiply to $10 (the way it might for a wealthier person), so it's easier to risk that $5 for a chance to win $5 million.
I think this is key. Turning $5 into $10 is impossible. Turning $5MM into $10MM is inevitable. The Lottery is a band-aid to treat the symptom (hopelessness). Address the root cause, which is the lack of opportunity for economic mobility.
I don't think this affects your overall point, but the lottery itself demonstrates that turning $5 million into $10 million isn't inevitable. Most big lottery winners end up broke again, if not worse, after not too much time. Obviously, the more typical sort of person with $5 million tends to do a better job with it.
Yes, but lottery winners don't tend to drop their winnings in the S&P 500, they typically blow it on toys and entertainment and gifts and end up with nothing.
I think you're on slightly different thread than we are.
We were saying that $5M is easy to turn into $10M, but $5 is impossible to turn into $10. We were referring to the fact that good investment vehicles are only available to people with large sums of money.
As a result, a poor person will be more inclined to blow the $5 on a lottery ticket because she has no investment options. It's still not a rational choice, but in her mind, she has nothing better to do with that $5 than take a chance at winning $10M. In her mind, that's how she gets to be a millionaire and no other way.
We weren't suggesting that a lottery winner will be a smart investor.
I was replying to the statement that "Turning $5MM into $10MM is inevitable." As the behavior of typical big lottery winners demonstrates, it's not inevitable. Possible, yes, probably even easy, just not inevitable. That's all.
I was careful to state in my initial comment that it didn't affect the overall point, and that rich people who get there through other means don't tend to fail that way. So there's no need to beat me up over missing the point, because I got it.
Larger sums of money are easier to invest in ways that will provide meaningful returns, and doubling your money is inevitable over the long term. In comparison, that $5 will probably turn into a meal or other short-term benefit.
If you have only $5 in your pocket as this month's disposable income, there is no investment vehicle for turning that into $10. Besides putting it in a bank where it will lose value due to inflation, gambling may be the only non-zero investment opportunity available to you.
On the other hand, if you have $5MM in your pocket, there are tons of investment opportunities for you to choose from, from treasury bills to angel investing, limited only by your appetite for risk. You have an entire financial services industry that exists for the sole purpose of helping you turn that $5MM into $10MM.
The idea of getting something for nothing, or less than what it's value is, is pretty hard to take from people. Lotteries just break that down to most base form, and slap a guarantee of authenticity on the return (however unlikely your chances are, it's not an actual scam or a lie that someone DOES win big)
To answer your questions..
1) no one, the state would shut any business like it down if it weren't the state itself - and that's a big flag in itself, as you mention.
2) If it's ok to have it, I don't see why it can't be marketed. It's age-limited (I'd say harder to break the rules and play underage than buying cigarettes and booze could possibly be since you have to go to the state itself to collect any large winnings)
3) "Players have more fun" is the one I remember seeing. If we were seeing ads like "I got out of my trailer park because I won big" or some such nonsense, I'd have more of a problem with it.
4) I don't know about that. That's assuming a lot on someone else's behalf. What you're calling an expression of hopelessness could easily be considered an expression of hope, or fantasy by others.
As long as he understands what he's doing and isn't spending himself into oblivion, it seems fine. I spent $60 on some fun flying yesterday and nobody ever gives me crap over that being a waste, and I can't even win any money with that.
The only gambling that makes rational sense is the megamillions jackpot: If you win it changes your life fundamentally (although for the worst for most, ironically) in a way not feasible in your lifespan.
If you're playing under a million dollar payout, you're basically losing no matter what. The payoff approximates what is achievable by other means.
Really, people should pause before calling behavior that does not conform to their model or their own preferences "irrational".
The typical argument goes like "Expected monetary payoff is negative, therefore buying a lottery ticket an irrational decision" -- but this ignores, for example, the possibility of winning a life-changing prize, that would provide enjoyment far above and beyond what e.g. investing money spent on lottery would, and there is no reason why this possibility cannot compensate for the expected loss. Technically speaking, claims of irrationality implicitly rely on assumption of concavity of preferences, but there are good reasons to think that it's not always correct.
It's not purely chance how well a company will do.
And if you just consider the statistics I wouldn't have thought that the fraction of companies failing is that extreme for it to be negative in the expectation value (especially if you group it into different categories, etc.). Economically it sounds counter-intuitive to me as well.
Most of the complaints about people playing the lottery being irrational are about people spending huge amounts of money, not about playing the lottery at all.
For instance the recent story of someone dumping their rent check into Powerball.
Lotteries are really a great wait for the state to collect taxes. Unfortunately the way the are currently handled results in too much profiteering/skimming/corruption.
I don't see it as preying on the poor. I see it as a hobby / investment of the poor due to thousands of other factors that already prey on the poor.
Imagine you have 0 chance of having any savings and barely staying ahead on your mortgage. The breakdown is this:
upper class: easy access to what you want and need
middle class: easy access to what you need
lower class: difficult access to what you need
If you are never going to have disposable income and forever be barely a paycheck ahead, what investments are available to you? You raise your child as well as you can for the school district and streets you live on, at best they go to a low-tier state school -> more debt. You can't retrain for a job because you are half a paycheck away from needing to take a second job.
In this situation, the outcomes are this:
don't play lottery -> 100% stay poor
play lottery -> 99.99999% stay poor
The government runs lotteries because otherwise criminal organizations would. Now if only the US government would apply this same 'harm reduction' strategy to other 'crimes' like marijuana use.
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But I see this as part of a larger trend of preying on the poor. Watching far-right media, I see poor people being told to invest heavily in gold, reverse mortgages, guns, and raging them up into sending all their money to political organizations whose sole purpose is to take money from the angry. And there are plenty of examples on the left as well (people investing in college degrees for the sake of college degrees without any idea if their field of study is a good investment or not). I don't know how we break these cycles and inspire low-income American citizens to temper their emotions and rationally invest in their futures.
2. Don't compare to letting the money sit under a matress. Insteaad, compare with other investments.
Buying a lottery ticket doesn't make sense when measured purely in terms of profit, even when the expected profit is non-negative.
Much easier to blame the lottery. Yes, poorer people like to buy lottery tickets. They want a chance to rise up and be rich, and there's really no other way most of them can ever do that.
Then maybe lottery tickets are actually smart.
Lotteries don't. Calling them entertainment is just an excuse for scamming money out of people. Calling them investment is just trying to confuse things.
Yes, buying lottery tickets for any reason other than entertainment is irrational. But does that mean it shouldn't be allowed? People are choosing to spend their money like this.
Personally, I prefer a government that lets people do stupid things -- e.g. buying a lottery ticket with the expectation of winning -- to a government that paternalistically enforces middle-class norms.
What an ignorant statement to make. Are you okay with people making "stupid decisions" like smoking in public places ?
Are you okay with people making "stupid decisions" like driving drunk ?
Are you okay with people making "stupid decisions" like shooting up a school ?
Society works when we look out for each other - and not let people do whatever they think is "right".
You think taking what little money poor people have from them via allowing them to spend it on lottery does not have social consequences ?
If a person or group of people does not act in a way that benefits you, they still have not harmed you. It simply means they have not chosen to conform to your expectations.
On one side you have the rights of the individual and on the other side you have the rights of the community.
Some people tend to lean the scale toward individual rights and others toward community rights.
Smaller government tends to handle the balance by staying out of the way until it's necessary that they step in. Bigger government tends to handle the balance by marking clear (or blurry) lines and moving them when necessary.
Of course this is always an awkward line to walk, and the definition of stupid is entirely subjective. Most things that make people happy aren't totally "rational".
To say that the government's job is to prevent us from making stupid choices is absurd. At that point, you may as well make cheeseburgers and fries illegal, and tax whole milk. `
Yes, because mature adults recognise that smoking in public places is no more offensive than poor bathing hygiene, and less harmful than woodsmoke.
> Society works when we look out for each other - and not let people do whatever they think is "right".
What is right? The majority? That's just a synonym for might.
How does buying a lottery ticket hurt others?
Spending a good bit of my formative years in Biloxi seriously changed my attitude around all of this.
The degree to which the casino industry in Biloxi is celebrated as a heroic engine of economic development and generosity depresses me. The Coast was no utopia before the casinos. And sure, yeah, the casinos employ a bunch of people and some tax money goes to local schools.
But seeing people - often poor people - gamble away their lives, seeing how much prostitution came into play, seeing how many hard drugs come in through them...I don't think the price was worth it.
But all you'll see in the local paper, and hear from most locals, is laudatory: casinos are the savior. We need more of them!
Lol...
The freedom allowing people to make those types of decisions trumps that argument.
Where would you draw the line and determine what we should "let" people do with their own possessions?
So you would not let a person gamble their house on a crap shoot? How about their car? Their watch? $5?
If you want to gamble your house away in a private bet, go for it, but the local government shouldn't move heaven and earth to get a casino built to enable thousands and thousands of people to make those decisions in the name of tax revenue.
Similarly, I don't think you would be taking away people's freedom in any meaningful way if, say, you limited lottery transactions to say, $20.
Only take it a step further. The state shouldn't move heaven and earth to get anything privately owned built. That it's a casino only makes something inherently bad even worse.
The nail in the coffin of the tobacco industry wasn’t “cigarettes are unhealthy,” it was that the tobacco industry was actively deceiving the public and obfuscating scientific research over multiple generations.
(When the sugar industry follows step (this seems inevitable), it will because they failed to police themselves with candid acknowledgement that soda should be a treat and not a dietary staple. Perhaps the Bloomberg soda ban was a bad idea and heavy-handed mommy gov't etc, but if the soda companies had an iota of sense they would have pre-empted the whole mess.)
So getting back to lottery… let’s agree that it is okay for people to act as they wish, but is it acceptable for lottery to misrepresent the astronomically low chances of even breaking even? Is it acceptable for lottery to specifically market toward people who can least afford it?
You could enforce monthly purchase limits based on income, you could require an accurate demonstration of statistics on every ticket, you could raise taxes and double ticket prices, all sorts of things that would get the primary market - people who buy tickets and really can't afford it - to buy less, but...
Hey, you never know.
People who don't play the lottery are always so quick to dismiss it. They disregard how accessible it is - you don't need a next-gen console or flat-screen tv, just cash - as they disregard how independently fun it is - you could be sitting alone in a dark room with nothing but a lottery ticket in your hand and be perfectly satisfied with fantasies of winning. It's like discussing guns with people who will never use them.
Let's not get too carried away by sensationalism and look at this from a bird's-eye view: lotteries are great sources of revenue (better than state corporate income taxes? Holy cow!), they are low-health-risk (someone may need treatment for gambling addiction but it never hurts their lungs or livers), and they are easy to scale up and down.
If the regressive-tax-on-the-poor argument is too convincing for you to resist, then here's a solution: register lottery purchases so you can only buy $X in lottery tickets based on your $Y income. Just don't come crying to me when the state comes for your income and property taxes to make up the difference...
The way to destroy money laundering would be to eliminate small returns of $2 on a $1 ticket (at maybe 5% odds).
The lottery is a very expensive way to get clean traceable money, but often enough not much clean traceable money is required.
The UK has something called "fixed odds betting machines". These are sometimes used to launder money.
http://www.theguardian.com/uk-news/2013/nov/08/gambling-mach...
> Earlier this month the Gambling Commission, the industry regulator, fined Coral bookmakers £90,000 in profits it made from one drug dealer who had laundered almost £1m in its shops. Last month the industry regulator also publicly admitted what has long been privately acknowledged: FOBTs present a "high inherent money-laundering risk".
The machines take £200 at a time. This would have been mostly in £10 and £20 notes. It's not clear from the article if the launderer put the whole £1m through the machines, or "just" £90k.
> Dealers feed their drug money through the machines, losing a little and then cashing out with the vast majority of their stake, James says. They can then collect a printed ticket showing they have gambled that day – meaning that if stopped by police, they can answer questions about why an apparently unemployed young man carries hundreds of pounds in rolled-up cash.
Either way, it's a lot of cash.
You mean that it also creates a toxic culture which disproportionally hurts poor people and minorities? Agreed!
> lotteries are great sources of revenue (better than state corporate income taxes? Holy cow!)
They're only so because the US has this inmensely powerful anti-tax culture and lobbies. Plus, lotteries take money from the poor, which means they're aggravating the very problems we use taxes to solve.
> they are low-health-risk (someone may need treatment for gambling addiction but it never hurts their lungs or livers)
Mental health issues are health issues. Gambling addiction is not a low health risk.
> Just don't come crying to me when the state comes for your income and property taxes to make up the difference...
They should! They should come for my income and for my property taxes, and even more so for the income and property taxes of those who are richer than me. Taking money from the poor to fund the services that poor people need is obviously counter-productive.
So the question I ask is: what is an acceptable compromise? Without a lottery, how much tax revenue are you going to need to make up the difference? How high can taxes be raised before people and corporations decide to move to the next state over, or even leave the country?
Taxes, lotteries, vices, addictions, weapons, they'll always be a part of our society and we shouldn't delude ourselves into thinking things we don't like can simply be deleted. So, where do you draw the lines, and where do you compromise?
This is one of the biggest reasons I dislike the lottery, from a societal perspective: it satisfies people who would otherwise have an incentive to go out and create their own success. You can see this anytime the jackpots get big enough that non-players buy tickets. There is a noticeable drop in productivity as people sit back and fantasize about winning $1 billion or more. Instead of actually doing something that would improve their lives, they're happy sitting in the dark and fantasizing. If that's a one-day a year occurrence, fine. But its clearly not a one-day occurrence to the regular players, and I think it negatively impacts their lives far beyond the actual cost of the tickets.
It's worth noting that, historically, haranguing people on values without sufficiently addressing their incentive network often does little to change them.
So what would you do differently?
I'll also note that I fundamentally disagree with your statement. Everyone has an opportunity to create their own success. Obviously not everyone has the same kinds of opportunities or the same number of opportunities. Those of us with enough time to comment on Hacker News probably have dozens of opportunities PER DAY to create our own success, whereas a poor black kid from Baltimore may only have one, and it may require him to wake up at 4am to go to work or stay up till midnight to educate himself. But those opportunities still exist, even if you're poor.
They could do that, but would they? They might just spend the money on beer or drugs.
One should be careful when making this sort of comparison-- at least from the standpoint of the overall economy. The cost of "producing the lottery" is more or less fixed relative to its revenue, i.e. its marginal cost is free, but it's not necessarily free for the other good they're comparing it to. For consumers to increase the number of movie tickets they buy or books they buy, more theaters have to be built or books have to be printed. The cost of producing the extra consumption goods is relevant, precisely because there is nearly zero cost of producing the consumer good that is a lotto ticket.
In other words, money is changing hands (mainly from the poor people's hands into the government's and from there who knows), but resources are not being consumed like they would be if we were constructing new movie theaters all over town. That particular aspect of the lottery is actually praiseworthy and might be missed by a simple comparison of consumer spending on it vs "all these other forms of entertainment combined".
Whether it's killing a man or providing jobs to miners, the dynamite doesn't care.
I know some family approaching 60 who are still paying off the house, 2 cars, and an RV. If that wasn't bad enough, they play the lottery every week because "somebody has to win".
I still think we should abolish social security, but after seeing countless examples of people racking up debt buying stuff they don't need and then depending on it in old age to avoid starving, it's almost enough to make me think it has some merit.
I feel like that entire line of thought with government-enforced retirement accounts leads to increasing taxes on the poor since they can't be trusted to responsibly spend it. Which actually might be what a lottery is.
1. They Lie, Lie about funding schools and lottery is the only way to do it.
2. Lie about the Prize money, the advertisements of lottery are untruthful and a private entity would be charged with fraud.
3. The practice of gaming the game, i.e. they try to make lotteries popular and sink a lot of money for advertising, they claim 50% goes for prizes but of the remaining 50% a lot goes to advertising than going to schools.
4. Taxing the winning, splitting the wins. Even if you win, you will be short-charged depending on the number of winners.
5. Exclude non-State entities from having their own lotteries, State monopoly.
6. Corporate tax cuts are pretty much common in states that aggressively promote lottery, lotto and video poker.
Even if it is entertainment, which it is not, Government should not be in it. I am not against lotteries, they need to competitive and have should have a level transparency, that is currently lacking since the law makers are the law breakers.
Just because you don't find it entertaining does not mean it's not entertainment.
I'm not necessarily disagreeing with your other points, but gambling of all types is most certainly an entertainment product, regardless of its tendency to create addiction, etc.
The thing is, he's very serious about his lottery. He enters every losing ticket into a second chance registration on Maryland's lottery site. (This was how I got him to start using the internet, actually) He won a few times and knows what he's losing. He's not bad at math. He's not rich either, he lives off of a very small military pension and has a job filling vending machines on a route.
I've pressed him again and again about how stupid the lottery is. I've pointed out the math, the bad odds, the addictive design of the games.. you name it. His answer remains the same. A shrug and "It's fun." I have since realized after spending afternoons with him at the places he likes to play, that it's his own odd social network. He knows all the employees, the other regulars. He complains about politics to the other players. He sweet talks the old ladies behind the counter. It's his excuse to leave the house. He keeps making his mortgage payments, keeps making his wife dinner every night, and takes care of his mother. If he wants to blow his fun-money on lottery at this point, I've just quit arguing with him and I go play with him when I visit. Losing 40 bucks to spend the afternoon with my old man is a bargain, in my eyes.
The problem with lotteries is that many of the players aren't like your dad. There are some serious ethical questions that arise when you think of lotteries are guaranteed to lose the vast majority of players a substantial amount of money:
1) If the state didn't run the lottery, who would? Would that money get funneled into public works if the state didn't run the lottery?
2) Is it ethical to market the lottery in order to create new players?
3) When the lottery is marketed (as it heavily is in many states), is it targeting vulnerable groups, like the poor?
4) Is playing the lottery an expression of hopelessness for some people? They know that their $5 is never going to multiply to $10 (the way it might for a wealthier person), so it's easier to risk that $5 for a chance to win $5 million.
I think this is key. Turning $5 into $10 is impossible. Turning $5MM into $10MM is inevitable. The Lottery is a band-aid to treat the symptom (hopelessness). Address the root cause, which is the lack of opportunity for economic mobility.
The $5 would be too small to even invest before getting eaten by fees.
We were saying that $5M is easy to turn into $10M, but $5 is impossible to turn into $10. We were referring to the fact that good investment vehicles are only available to people with large sums of money.
As a result, a poor person will be more inclined to blow the $5 on a lottery ticket because she has no investment options. It's still not a rational choice, but in her mind, she has nothing better to do with that $5 than take a chance at winning $10M. In her mind, that's how she gets to be a millionaire and no other way.
We weren't suggesting that a lottery winner will be a smart investor.
What do you mean?
On the other hand, if you have $5MM in your pocket, there are tons of investment opportunities for you to choose from, from treasury bills to angel investing, limited only by your appetite for risk. You have an entire financial services industry that exists for the sole purpose of helping you turn that $5MM into $10MM.
To answer your questions..
1) no one, the state would shut any business like it down if it weren't the state itself - and that's a big flag in itself, as you mention.
2) If it's ok to have it, I don't see why it can't be marketed. It's age-limited (I'd say harder to break the rules and play underage than buying cigarettes and booze could possibly be since you have to go to the state itself to collect any large winnings)
3) "Players have more fun" is the one I remember seeing. If we were seeing ads like "I got out of my trailer park because I won big" or some such nonsense, I'd have more of a problem with it.
4) I don't know about that. That's assuming a lot on someone else's behalf. What you're calling an expression of hopelessness could easily be considered an expression of hope, or fantasy by others.
If you're playing under a million dollar payout, you're basically losing no matter what. The payoff approximates what is achievable by other means.
The typical argument goes like "Expected monetary payoff is negative, therefore buying a lottery ticket an irrational decision" -- but this ignores, for example, the possibility of winning a life-changing prize, that would provide enjoyment far above and beyond what e.g. investing money spent on lottery would, and there is no reason why this possibility cannot compensate for the expected loss. Technically speaking, claims of irrationality implicitly rely on assumption of concavity of preferences, but there are good reasons to think that it's not always correct.
And if you just consider the statistics I wouldn't have thought that the fraction of companies failing is that extreme for it to be negative in the expectation value (especially if you group it into different categories, etc.). Economically it sounds counter-intuitive to me as well.
For instance the recent story of someone dumping their rent check into Powerball.
Imagine you have 0 chance of having any savings and barely staying ahead on your mortgage. The breakdown is this:
upper class: easy access to what you want and need middle class: easy access to what you need lower class: difficult access to what you need
If you are never going to have disposable income and forever be barely a paycheck ahead, what investments are available to you? You raise your child as well as you can for the school district and streets you live on, at best they go to a low-tier state school -> more debt. You can't retrain for a job because you are half a paycheck away from needing to take a second job.
In this situation, the outcomes are this: don't play lottery -> 100% stay poor play lottery -> 99.99999% stay poor
what do you choose?