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The high cost of lotteries

In this file photo taken on October 23, 2018, a woman buys Mega Millions tickets hours before the draw of the $1.6 billion jackpot, at a liquor store in Downtown Washington, D.C. (Photo by Eric Baradat/AFP/Getty Images)
Helaine Olen

According to Mega Millions officials, one winning ticket to the eye-popping $1.5 billion lottery was purchased in South Carolina. Congratulations to the still anonymous winner or winners! As for the rest of you … we need to talk.

Yes, I admit it feels churlish to come at the lottery all humorless. Almost no one is immune to the occasional appeal of Mega Millions, Powerball or other state-sponsored games of chance. In 2016, Gallup determined at least half of us bought at least one lottery ticket in the past year. Lotteries are all but catnip for our age of inequality, a few moments of our own personal version of the “Fiddler on the Roof” song “If I Were a Rich Man,” before we return to our regularly scheduled lives. It doesn’t seem like a particularly expensive vice when viewed one ticket at a time: A Mega Millions ticket costs $2, less than a McDonald’s medium french fry. But it adds up: Last year, Americans spent $72.97 billion on lottery tickets, more than twice as much as we spent on theatrical and home entertainment.

And it turns out one group is more likely than others to purchase a ticket and they are the ones that can afford it the least: those who live on lower incomes. The reasons are depressing. One survey found that almost 40 percent of those living on $25,000 a year or less thought winning the lottery was their most realistic chance to acquire a six-figure nest egg. A failure of financial literacy? Almost certainly. But it’s also the case that people have been sold on the lottery as a get-rich-quick mechanism. More than a few ads put out by state lottery commissions over the years have been directed at the less well-off among us. In “Lottery Wars,” Randy Bobbitt complied examples. One was a billboard of a family with eight children standing in a tenement room with the tagline (helpfully provided in both English and Spanish) “The New York Lottery helped me realize the great American dream.” Massachusetts college students were told they could “become a millionaire before you graduate” if they played the state lottery.

In addition, the lottery has been sold as a way to pay for essential state services without raising taxes, something more than a tad valuable in an age as tax averse as our own. In the mid-1970s, 12 states held lotteries. In 2018, only five states don’t participate in some way. In California, where state lottery revenue is mandated to pay for educational services, the state’s Lottery Commission boasts on its website, the moneys raised go to “create computer labs, begin essential accelerated reading programs, keep arts and music programs alive and invest in Advanced Placement classes — all to give their students, their scholars, the best chance to succeed.” But while lottery ticket sales in California have soared, the amount of money given to education has flatlined, according to a KPCC/LAist investigation published earlier this year, as changes in the law regulating the lottery system permitted more money to go toward prizes in an effort to encourage more people to buy tickets. At the same time, the money is divided between California public schools in such a way that doesn’t take into account where the tickets were sold — something some education advocates claim effectively results in taking money from the poor and giving it to the wealthy.

Moreover, in many cases the money isn’t really a supplement as much as it allows the states to spend more money elsewhere, secure in the knowledge lottery revenue can cover basics. “It’s a big ruse,” the then-president of the Virginia Education Association, the state’s teacher’s union, said in 2009. Little wonder preeminent financial reporter David Cay Johnston calls lotteries “the most heavily taxed consumer product in America. It’s a regressive, albeit voluntary, tax that is too rarely acknowledged as such.

By the way, if you suspect you are hearing about more mega jackpots, such as the $1.5 billion Mega Millions, you are not wrong. Lottery officials have figured out that in an age that worships wealth like ours (Reminder: We elected a businessman president based on criteria such as “I’m really rich.”), the more eye-popping the prize, the more likely people are to plunk down their hard-earned money on a ticket. So the folks behind Mega Millions changed the rules last year, increasing the jackpots by increasing the ticket price and making it harder to win. In other words, you’ve sort of been had.

The lottery is all too symbolic of our society, where wealth is pitched as something almost anyone can achieve with the right attitude, when, in fact, the odds are against you in more ways than you can imagine. I don’t expect any of this to stop you from buying a lottery ticket ever again. I know all of it, and it didn’t stop me. But I do want to make you think for a moment before you go out and purchase a ticket for the Wednesday evening $620 million Powerball jackpot. Do we really want to encourage this sort of thing?