What's Wrong with Playing the Lottery?

December 30th, 2013

‘Tis the (Scratch-Off) Season

Did you find lottery tickets in your Christmas stocking? Did you stuff some in someone else’s? Every holiday season, state lottery agencies spend their advertising dollars persuading consumers to buy tickets for folks on their gift lists. Here in Pennsylvania, we’ve watched versions of the same TV commercial for 20 Decembers: A jovial gentleman shuffles through snow-filled streets giving scratchoff tickets to coffee-shop and newsstand workers, while faux Dickensian carolers sing about various “instant win” games to the tune of “The Twelve Days of Christmas.”

I once received lottery tickets as a Christmas gift. The givers wanted me to “scratch-’n’-win” in their presence. My five tickets, which cost them a dollar each, yielded zero dollars, zero cents prize money. Call me ungrateful, but I’d have preferred the five bucks! And what if I’d won a fantastic sum? Would I have felt obligated to share it with the givers? Would they have felt resentful if I hadn’t?

Across the pond, the United Kingdom lotto suggests, “If you can’t stand the idea of your friend winning without you, you could always buy a duplicate ticket for yourself so that the jackpot is shared if those numbers come up!” O. Henry’s “The Gift of the Magi,” it ain’t.

“Hope and Dreams on Sale”

Whether or not lottery tickets figured into your festivities, they are familiar to plenty of Americans all year long. Forty-three states, along with the District of Columbia, Puerto Rico, and the US Virgin Islands, run lotteries. (The lottery-less states are Alabama, Alaska, Hawaii, Mississippi, Nevada, Utah, and Wyoming.) In addition, such games as Powerball and Mega Millions draw players from across state lines with the possibility of huge payouts. As of December 8, the Powerball jackpot stood at $122 million—an impressive amount, but far from the record-smashing totals that persuade even more people to play. When the jackpot reached its highest level yet, $590 million, last May, 232 million tickets were purchased.

“More than half of us have played the lottery in the last year,” according to Cable News Network (CNN), “although 20% of customers buy the majority of the tickets.” In fiscal 2012, Americans spent around $78 billion playing lotteries. Since 1964, when New Hampshire launched the first modern state lottery, ticket sales have gone up every year, “even during the Great Recession,” reports CNN Money, “when the sale of most other items declined.”

What drives the popularity of lotteries? Not the astonishingly long odds. You’re more likely to be attacked by a shark (one in 11.5 million) or die in a lightning strike (one in three million) than you are to win Powerball’s grand prize (one in 175,223,510). You’d have to buy 86 million tickets to reach even a fifty-fifty chance of winning. Science journalist Eric Berger says the only eventuality with even higher odds is a meteor crashing into your house (one in 182 trillion).

Other factors, then, influence people’s decisions to play. Economist Melissa Kearney says, “For the majority of lottery players, they are getting a bit of entertainment or consumption value. Simply the fact that it isn’t a positive return doesn’t mean it’s an irrational choice.” One reason the lottery can be so entertaining is that we enjoy fantasizing about what we’d do with a seven-figure (or more) windfall. As Rebecca Paul Hargrove, president of the Tennessee Education Lottery Corporation, puts it, “For $2 you can spend the day dreaming about what you would do with half a billion dollars—half a billion dollars!”

Clinical psychologist Dr. Stephen Goldbart suggests the lottery appeals because “it lets you believe in magic: that you will be the one who spent a little and got a lot . . . the money that will . . . give you a respite from the conflict, complexity, and angst of everyday life.” In other words, the lottery offers a vision of a better future, even though it won’t grant it to most who play. “It’s a game,” writes journalist Adam Piore, “where reason and logic are rendered obsolete, and hope and dreams are on sale.”

“The Worst Thing That Ever Happened”

Most states don’t allow lottery winners to remain anonymous (only Delaware, Kansas, Maryland, Michigan, North Dakota, and Ohio do). Pennsylvanians can browse an online gallery of winners and read about their lucky tickets; if your state runs a lottery, you probably can, too. “The single-best commercial that the lottery has,” says attorney Andrew Stoltmann, “is the press conference that winners hold discussing how the lottery winnings have changed their lives.”

Some winners’ stories generate positive publicity. For example, among the “Oceans’ 16” Powerball winners last August—coworkers in New Jersey who jointly held one of three winning tickets in a $448 million jackpot—were several people who lost property to Superstorm Sandy. One winner announced her immediate plans: “Buy me and my daughter a home and bring my dog back home.” Stories of storm victims, single parents, or financially struggling families “hitting it big” can make us feel good about lotteries and the players who win them.

But the public generally overlooks the potentially negative consequences of winning the lottery, unless or until those consequences make attention-grabbing headlines, too. In 1997, Billie Bob Harrell Jr. won $31 million in the Texas Lottery. After two years of stress caused by strangers seeking handouts (Harrell had to change his phone number multiple times), bad business choices, and a separation from his wife, Harrell died, apparently from a self-inflicted gunshot wound. “Winning the lottery was the worst thing that ever happened to me,” he once said.

Harrell’s case may be extreme, but some lottery winners find their new wealth brings new woes. “There are very few things in life that someone’s life could change that great, that suddenly,” observes Jason Kurland, an attorney who specializes in representing lottery winners. The instant influx of money, the unwanted attention it brings, and the internal emotional and psychological responses to winning can all create problems. Financial planner Michael Boone reports only half of lottery winners are actually happier three years later. He quotes Henry Ford: “Money doesn’t change a person, it simply unmasks them.”

Social Benefit or Social Bane?

In its 1999 report to Congress, the National Gambling Impact Study Commission observed, “The principal argument used in every state to promote the adoption of a lottery has focused on its value as a source of ‘painless’ revenue: players voluntarily spending their money (as opposed to the general public being taxed) for the benefit of the public good.” According to the North American Association of State and Provincial Lotteries (NASPL), states gained over $19 billion in 2012 for education, senior citizen services, health care, and other programs.

But do lotteries intended to help “the public good” actually harm great portions of the public?

Like any gambling, the lottery carries addictive potential for some players. In 2005, the New York Council on Problem Gambling found 40 percent of calls to its hotline were from people with lottery-related issues. “There’s just not a lot of research,” said director Jim Maney, but for those who gamble, the lottery is “the biggest problem in New York state.”

Others question the lottery’s impact on people in poverty. In 2012, for example, the Dallas chapter of the National Association for the Advancement of Colored People (NAACP) called for an end to the Texas Lottery, charging it “targeted . . . black people and poor people. . . . Our people are spending their little money, their life savings away in hopes of winning,” said president Dr. Juanita Wallace. One analysis of North Carolina lottery data revealed that “all but two of the [state’s] 20 most impoverished counties had per capita [lottery] sales that topped the state average.” The Bangor Daily News found residents of Maine’s poorest county spent the most per capita on tickets.

For its part, the NASPL points to research suggesting that frequent lottery players “are no more likely to be poor or have little formal education” than anyone else, and claims, “The overwhelming majority of poor people, along with the overwhelming majority of upper-income people, play with restraint and moderation.”

George Loewenstein, a professor of economics and psychology, rejects the idea that most lottery players, poor or otherwise, are harming themselves: “It’s ridiculous to say that 51% of the population is just irrational or self-destructive. . . . [The lottery] serves a psychological function. . . . Our pleasure of living is not only based on our current situation, but . . . what we can imagine our situation could become.”

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