Are Lotteries a 'Rip-Off'?

Our View

This article is based on an exchange of messages in an Internet newsgroup.

How It Started:   An opinion was voiced that lottery games are a "rip-off" because only a few people win, while more people lose.

Here is our response.

Choosing to Play

Why would anyone want to play a public lottery game?

It is true that only a few people win prizes, and that more people do not win prizes.

But that does not make the lottery game a "rip-off." Not by any stretch of the imagination.

First of all, only the "big" jackpot winners make the news. We never hear about the players who take home a nice 4-number or 5-number win. They simply don't make the news. But they do make some 'news' in their families, and their smiles will be shared there.

There is a lot more to public lottery games than makes the headlines.

If we can afford a modest budget for playing, a lottery game can provide a unique suspense and excitement -- plus the possibility of a major change in our fortune and lifestyle. That is a fresh possibility with each new draw. Any player can freely decide whether he or she wants to take the chance or ignore it.

We play to win. But what really happens if we lose?

We manage our budget wisely. We have spent what we could afford to spend. It wasn't money that was needed for another purpose. We could just as well have spent it on some other form of entertainment, but one with less potential.

And in this case, we spent it for a good cause.

This is not to suggest that we play only for charitable purposes. Again, we play to win. But we do not have to complain about losing.

Looking at the Games

The public lottery game commissions could do better to describe one important point:  What the games do for our communities.

They could do a better job of stressing the benefits of our lottery games.

They could certainly do better at showing how the lottery revenues make a difference in public schools, senior citizen programs, and in other ways. They dould do this instead of bringing out more games and more advertising of prizes. They could make a far better case for what they do.

Explaining the games better would be a good idea. But the games themselves are the best idea.

The games are not a rip-off. Not of any individual citizen, not of the public at large. They are simply a way for the States to raise money for public programs. Those programs exist through public law, and they must be funded. And that way of raising money is more voluntary and more enjoyable than paying taxes.

Overall, the State governments are responsible for how they get our money, and they are also responsible for how they spend it. State lottery commissions are wide open to the scrutiny of the press -- newspapers and TV -- as much as any other part of the State government. Probably more so, because of the interest of the public. That scrutiny includes reporting in the press on how the lottery revenue goes in both directions. For example, there was new legislation pending for the games recently in Massachusetts, and it made front page headlines there for several weeks.

If a State does not use its lottery revenue wisely (say, to properly support education), that is not solely a "lottery" issue. It is a larger issue. The same legislators draft the regulations for lottery revenues and for other revenues. One might find that they do not use the other revenues from income taxes, sales taxes, property taxes, licenses, tolls, and the like, any more wisely than the lottery revenues. Then we have to address the larger issue, instead of condemning the lottery.

The larger issue is: How accountable are the State officials for the way they spend our money? We always need to know how they raised the money, but that is not exactly the same as the matter of how they are spending it. Money could as easily be mis-spent if it came from general tax revenues. The public's task is to keep at our folks constantly to spend our money honestly, wisely, and efficiently.

None of this makes the lottery game any kind of 'rip-off'.

Another Point of View

Looking at it from another point of view: If we don't like the way our State lottery spends our ticket money, then we don't have to play. We'll find something else to do that is more enjoyable. On the other hand, if we don't like the way our State government spends our tax money, we still have to pay our taxes. We can think of something that is more enjoyable, but there is no choice.

In both of these cases, we can complain to our legislators, we can campaign for the right programs, and perhaps we can vote on them in a year or two. But only in the case of the lottery game, we can vote immediately with our wallet.

Taking It to the Limit

This next part will sound pretty far-fetched, but let us go with it for a minute.

Let us visualize a State government that is run entirely on its public lottery revenues. It has no taxes or other revenue.

Every Saturday night, the public "votes" by either buying a sufficient quantity of lottery tickets, or not buying them. That lottery revenue supports the entire infrastructure of the government and of all public programs.

Over a period of time, the public's approval or disapproval will be felt. The public would tend "up" in enthusiasm, or "down" in apathy, depending on their perception of how their money is being spent.

In other words, we are constantly approving or not approving of how our lives are being affected. We do this constantly as we live with the institutions around us, like schools, safety, health, roads, and other programs. The public's perception is everything, from 'gut' feel to coffee shop conversations, to talk shows, to government hearings and newspaper headlines.

To that government, their sole operating revenue is a voluntary, direct and immediate reflection of public approval or disapproval. When trends develop, they will be clear messages to that government. There are no other revenue options. You can bet that the government officials will be trying to manage that money wisely, because it can dry up very rapidly. And they will have the press looking over their shoulder at every step.

I said this would be far-fetched. But keep it going another few moments.

Suppose the public tended "down" in apathy for the lottery, due to a dislike for the way the government is being managed. What would be the government's solution? Fix the problem? Or instead, to require the public to provide a new revenue source, based on mandatory taxation, with penalties for non-payment? To place at a greater distance the public's ability to respond to their government's policies for spending their money?

Back to reality now.

Both methods of revenue exist today:  Voluntary from the public lottery games, and involuntary from taxation.  The voluntary part is in no way more flawed than the involuntary part.

Here is the main point: There is something that exists beyond the public lottery game, and it has something to do with satisfying the public need in the most democratic manner. It has nothing to do with the statistical odds of winning a prize. If there's a problem, then we must fix the problem. Removing the lottery game does not fix the problem.

Coming Back to Reality

The lottery is not a rip-off. It is as good a program as our elected people can humanly construct to give the public what we want. And it is probably better than many other such programs.

CDEX