Monday, December 29, 2008

Lottery Sales Down

I heard a piece on NPR a short while ago that discussed reduced lottery ticket sales in these tough economic times. My overall reaction was, "that's fantastic!" While there are a few downsides to this trend, I still think it's incredibly heartening news.

Lottery tickets have been called a "tax on the stupid." That's a rather harsh pronouncement, but it contains a sad grain of truth. Lottery tickets sell best in counties with the lowest incomes and highest rates of unemployment, to the very people who can least afford to risk what little money they have. A Chicago journalist quoted people in impoverished neighborhoods who spend anywhere from $7 to $25 per day on the lottery. Buying a ticket gives them a brief momentary thrill of hope. But of course few of those hopes are ever realized. In a neighborhood cited in that article the average annual income is $13,331, and the average adult spends $269 on lottery tickets per year. That's just over 2% of their gross income. Essentially, lottery tickets are a form of very long odds gambling, always a losing proposition. Mind you, I'm not saying the poor are stupid. But collectively it must be admitted that buying lottery tickets is not a smart strategy. Those same few dollars each day, if saved, could slowly grow into a substantial nest egg over the years. The odds on the nest egg will beat the odds on winning millions every single time.

But there's a grain of truth to the claim that lottery tickets are a tax too. In most states lottery proceeds go to support the public schools or other social services. That means that as fewer tickets are sold, education budgets suffer shortfalls. It's a sad state of affairs when our system of education has to rely on monies raised in this way. I don't like the idea of schools going begging for funds. But neither do I think that anyone struggling to make ends meet should fritter away their money chasing wildly improbable odds.

Ultimately, this is a good news-bad news sort of story. But I tend to look at this on the bright side: fewer people in difficult circumstances are foolishly throwing their money away. Schools may end up needing more help because of it. But I'd guess that schools have a better chance at getting money they need than the working poor have of getting extra money to replace the cost of lottery tickets. In my view, buying lottery tickets ranks right up there with smoking as one of the most pointless, destructive, and costly habits one can take up. Sure, if you're very rich there's little harm in buying a lottery ticket now and then. Most of us aren't in that boat though.

What say you? Do you ever buy lottery tickets? Is there any good reason to do so?


It's me said...

I buy scratch-its about 4 times a year. Usually I'll be grabbing something and see one that catches my eye and say "What the heck. Ring one up". Me, the big spender. ;) And about once a year I buy a true lottery-lottery ticket (megabucks thingie). Why? It all harkens back to the: you can't win if you don't play. Who knows, it COULD happen. I'm not exactly holding my breath.

Ali said...

I buy lottery tickets as little hostess gifts -- to bring to the weekly card game, or to casual cookouts, or for stocking stuffers. I never buy for myself, but find poeple enjoy them as small gifts.

Anonymous said...

The public education thing is our state (California) the money doesn't really go to schools. I mean it *does* go to schools, but then the state government reduces their schools budget by the same amount. So, no *extra* money goes to schools. It basically replaces what the government was budgeting, rather than adding to it.

I think there's a general misconception that it's funding schools above and beyond, and, unfortunately, it's not. Too bad too, because it could have been a great source for things the states continue to cut, such as athletics and musics/dance/performance arts.

Anyway, I don't play the lotto. :)

Emmy said...

Wouldn't it be more fun setting fire to your money?

gardengrl said...

I agree...burning money would be so much more fun.

I work at a grocery store where we sell these. I have seen people come in and buy 20-30-40-100 dollars worth of tickets...scratch them, right there in the store, and win nothing.

I dont know about anyone else, but 20-30-40-100 dollars would go a LONG way around my house.