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Mega-million jackpot comes at a cost

~ By Joel Hilliker ~

Many see it as harmless fun. An enormous number of people stupidly view it as a sound investment. In fact, a lottery is a scam that creates far more problems than it is purported to solve.

Why? Because it is fundamentally, profoundly immoral. On one side of the exchange is someone seeking to get something for nothing. On the other side is a government enriching itself by preying on its citizens’ human frailties, heedless of the damage it is causing the people it is meant to serve.

Still, it is big business, and growing. Last year, Americans spent $56 billion on lotteries. More Americans play the lottery than regularly attend church.

Get this: One in five Americans say winning the lottery is the most practical way to amass wealth, according to a survey by the Consumer Federation of America and the Financial Planning Association. Not working hard, or saving, or investing soundly, or contributing a useful product or service to the free market. The most practical means to gain wealth is to throw money into a giant whirlpool of impossiblility and cross your fingers.

Among poorer Americans, this delusion is even more pervasive. A full 40 percent of people making under $25,000 a year believe the lottery is their best hope of financial security.

Behold this regrettable manifestation of a whole pack of lies commonly promoted and believed in America today: that honest work is a curse and idleness a blessing; that happiness comes from materialism; that luxuries are a birthright; that wealth redistribution is only fair; that dreams of fame and fortune can come true, no matter the odds; that it is more blessed to receive than to give.

Institutionalised Gimmick

Nevertheless, lottery authorities are more than willing to help these fools part with their money. They try to wash their hands of any guilt by recommending that people play “only for fun,” and only with money they can spare. But they’re kidding themselves: They know full well that their biggest customers are lower-income folks.

They don’t care, though. They need the cash. In a tough economic climate, where indebted state and local governments face rising costs, dwindling revenue and unprecedented cuts, more and more are turning to gambling for a quick fix. That’s why you’ve seen casinos suddenly popping up in nearly every state in the union. And it’s why lotteries are more and more common. What our grandparents would have frowned on is now heavily promoted by authorities, usually in broadly accepted terms - as the solution to shortfalls in education funding, for example. Today, 43 states have lotteries; 27 of them earmark lottery money for education.

Viewed in the extreme short term and without respect to morality, it’s a boon. Generally, administrative costs and payouts to winners only take 75 percent of lottery revenue - and even the prize money is heavily taxed - leaving a handsome cut for the state or city to spend as it pleases. In 2010, states collected an average of $58 per person from their lottery programs; Delaware brought in $370 per person. In last week’s Mega Millions, the 42 states that sold the tickets and pooled their grand prize will collect 44 percent of the revenue - a cool $660 million. The three states where winning tickets were bought will also, of course, tax the winnings.

Put simply, lotteries are a tax on the people who can least afford it. Set aside the investigations that show how little of the money actually ends up getting used for the big-hearted purposes for which lotteries are publicly advertised. Cities and states are extracting a disproportionate percentage of these dollars from families that, really, have no business throwing money away. The same hard times that are hitting governments are also pounding the families sinking their bucks into Mega Millions and Powerball.

Not Worth the Cost

In one sense it is pitiable, and in another sense criminal, that at the same time we are witnessing rising unemployment, climbing costs of living and record debt, we are also seeing soaring lottery ticket sales.

The short-term revenue boost for states from lotteries and casinos carries steep long-term costs, including further impoverishing the poor; sucking money out of local economies that could have gone toward more productive activity; and fueling gambling addiction that leads to other social pathologies. America already has an estimated 15 million problem gamblers—people for whom life can quickly turn into a nightmare of debt, bad checks, bookies and loan sharks, embezzlement, broken homes, wrecked lives. On top of that, casinos in particular tend to be magnets for other evils like prostitution, drug trafficking and organized crime.

The fruits are bad all around. Even the tiny few who actually win the lottery usually end up the worse for it. Studies have shown that 90 percent of them blow all their winnings within five years. “In the process, they will see family and friendships destroyed and the financial security they hoped for disappear,” said financial adviser Daryl LePage. Winners often become victims—of scams, bad investment advice, never-ending solicitation, or libel and slander lawsuits. Many experience bankruptcy, a surge in family problems, and divorce.


This is an excerpt of an article first published on thetrumpet.com

Headline photo courtesy of bills.com

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