Before we get going, make sure to check out my latest article over at Glibertarians – especially if you’re a fan of old Colt cap-and-ball revolvers. And if you like that, you can read the rest of my Glibs articles at the link on the right.
Now then: I’ve long referred to the various state lotteries as “a tax on stupidity.” The New York Post’s Howard Husock agrees, but I do take issue with a couple of his points. Excerpts, with my comments:
The advent of government-organized gambling, in the form of state lotteries, is one of our age’s most unnoticed social transformations. Before 1964, America had no such lotteries. Today, only five states don’t run their own, and most others permit interstate games such as Powerball, which jack up prizes to extravagant levels. Lottery participation has skyrocketed. Overall revenues total some $80 billion; New York is the state leader, with $10 billion in ticket sales. The spread of lotteries has played a leading role in the normalization of gambling, once considered a vice akin to drug use or prostitution — and lottery sales are boosted by publicly funded advertising campaigns that prey on the weakness of gambling addicts while encouraging non-gamblers to get involved, too.
Now, let me tell you where I sit before I tell you where I stand; I think that gambling should be legal. It’s not the role of government to shield people from the consequences of their own bad decisions. But with that said, I agree, the various levels of government should not be spending tax dollars to encourage people to play state-sponsored lotteries. It’s a stupid waste of taxpayer’s money, which is, of course, money confiscated from the citizenry with the implied use of force.
At least the lotteries are voluntary.
It’s common for states to frame lotteries as being for a good cause — for public education, say. The claim is meaningless, though: All state money is fungible. The lottery proceeds go into the state’s general fund; one could just as easily say that they’re used to pay down interest on debt.
In Colorado, the money supposedly goes to parks and open spaces – but as Husock points out, that’s all fungible. Money is money is money, and once absorbed into the State, it’s impossible to control where it goes.
But here’s where Husock and I part ways:
It’s time for states to ban lottery advertising. Sure, let people play, post the winning numbers — but stop selling the dream.
Let’s be careful with the terminology here. I think the various state governments should cease wasting taxpayer dollars on advertising the lotteries – and lots of other things. But a complete ban on advertising? That would imply a prohibition on a private store owner putting up a sign stating “Lottery tickets sold here!” That’s not reasonable.
Weaning government from our addiction to promoting lotteries wouldn’t be easy. An adjustment period would be necessary as lottery revenues fell — though perhaps the adjustment would not be dramatic. Massachusetts, among the first states to mount a lottery, later moved to limit advertising — at one point, cutting it from $12 million to just $400,000 a year — but the state has not seen lottery revenues crater.
I doubt many states would see much difference. Everyone knows the lotteries are there. Everyone knows where you can get tickets.
On the positive side, tax revenues might even increase as citizens, freed from such dispiriting messages, re-embrace working and saving. In any case, though, getting states out of lottery advertising is the right thing to do.
I doubt that. If you were to draw a Venn diagram with one side being “people who embrace working and saving” and “people who plan on the lottery as their retirement plan,” you’d have very little overlap.
My issue with state lotteries, and the reason I call them “a tax on stupidity,” is primarily this: The odds are awful. And why? The vigorish. That’s the cut the house takes in any gamble. If you want to gamble, your odds are much better if you just go to the nearest casino and play slot machines. In Las Vegas, most slots pay out between 95 and 98 cents on each dollar gambled. The state lotteries? Under 50 cents. The vigorish on state lotteries is awful, which is why the states love them.
So, play the lotteries if you like; it’s a free country, and there’s nothing wrong with paying a couple of bucks for the chance to fantasize about what you’d do if you won. Just be aware that the odds are astronomically small. And, yes, be aware that your state may well be wasting taxpayer dollars encouraging you to indulge in a bad deal.