Thursday, July 17, 2014

State lotteries exploit the poor (NPR)

I've said this before but it bears repeating [emphasis mine]:

Constant re-betting cuts the payback from lotteries significantly. And the official payback rate is not that good. Massachusetts returns on average about 73 percent of every bet, the highest of any lottery. That is still dramatically worse than the 90-plus-percent payback of casino games.

Why would anyone play such bad odds? With thousands of outlets in each state — Massachusetts has 7,400 — economists say the sheer availability of lotteries gives them a decisive market edge. 

Cornell University economics and management professor David Just offers another reason why gamblers bite. "What appears to be happening is that they really believe that there's going to be a return on this investment," he says.

Just and his colleagues crunched lottery data from 39 states. He says many people, especially the less educated, simply don't understand how abysmal their chances are.

Even if everyone did understand, Just says, his research shows why some still might play.

"It's the desperation play," he says. "People don't treat it like entertainment. Instead those — particularly those who are poor — are treating this more as an investment opportunity. It's their Hail Mary pass to try and make it big."

And here's some red meat for my dear conservative friends:

"To me the astounding thing was looking at how much the prevalence of people down around the poverty rate, particularly people who were on different forms of welfare, that those really did correlate so tightly with lottery play," Just says.

Call me a conservative prude, but I think it's immoral exploitation of the poor. Moreover, the U.S. is fooling itself if it thinks it can gamble its way to economic prosperity. 

States may think they've found in gambling and lotteries the golden goose to pay for schools, roads, police, etc. but what they're really doing is taxing desperate poor citizens to pay for all these "extras" -- and indirectly getting the federal government to chip in via welfare.  Why not simply let the federal gov't. spend more on roads and schools directly, like liberals want, instead of doing these things the meandering, inefficient "free-market" way??

Meanwhile, folks like myself who don't gamble get to enjoy all the same public benefits without paying a cent. That's not fair, right?

UPDATE (08.08.2014): Here's a hypocritical selfie of me, wearing a Keno t-shirt. Hey, it was free, 100% cotton:

I'M actually fun every 3 minutes, so who needs Keno?

By Steve Tripoli
July 16, 2014 | NPR

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