The Problems with State Lotteries: Chance for Quick Fix Presents Irresistible yet Dangerous Lure for the Poor
One of this summer's great spectacles was the Powerball fever that gripped the nation. With a nearly $300 million jackpot at stake in late July, millions flocked to their lottery agents to place bets on the multi-state lottery game. The jackpot was finally hit on July 29 by a consortium of 13 workers from Ohio. While the drawing was a time of great excitement for those 13, it should also serve as a time of introspection for the rest of us.
This Powerball drawing offers a good time to assess the impact of gambling, especially state lotteries, on our society. Many of the players in the lottery behaved responsibly, realizing the odds of winning Powerball are an astronomical 80-million-to-1 and, therefore, bought only a few dollars' worth of tickets. There is nothing wrong with this recreational gambling.
Unfortunately, a great number of Powerball players were much more foolhardy. In any state and probably any store that sells Powerball tickets, cases of compulsive gambling will abound. Tales of customers spending $100, $200, and even $500 on Powerball tickets were frighteningly common. Some spent even more. One waiter from New York City claimed to have spent $3,000 in Powerball tickets in Greenwich, Connecticut. The hysteria was so damaging that the executive director of the New Hampshire State Lottery took the surprising action of holding a press conference urging people not to spend beyond their means.
The anecdote of the waiter highlights a second problem that became obvious with the recent Powerball affair: Many Americans are willing to travel long distances just to bet into these lottery pools. Stores in southern New Hampshire, a state which participates in Powerball, coped with lines of up to several hours in the wake of a mass influx of residents from Massachusetts, a state which does not issue Powerball tickets.
The Powerball winners themselves, all Ohioans living in the Columbus area, drove 100 miles to Indiana to play the game. But nowhere was the mob frenzy as evident as it was in Greenwich. The quiet Connecticut town, having the misfortune of being the first over the New York border, was inundated by residents of the Big Apple queuing up for Powerball tickets.
Lines at many of the town's gas stations and convenience stores were 500 players long, and one needed to wait for six hours before finally reaching the betting terminal. Traffic was gridlocked for days, and several arrests were made for disorderly conduct. The town spent $80,000 to cover police details and emergency contingencies. Town police chief Peter Robbins stated, "This is the worst thing I've ever seen, and I've been here 28 years."
No wonder why Greenwich town officials have talked about ending Powerball sales in their town. The people playing Powerball and other lotteries are not the wealthy, but the poor and working classes, those who can least afford to part so recklessly with their money. Massachusetts studies have revealed this state's lottery sales are heaviest in cities like Chelsea, Lawrence, and New Bedford, which also have the state's highest unemployment and poverty rates. Lottery sales are barely detectable in places like Weston, Wellesley, and Sudbury, where the three-Mercedes household is de rigueur.
While there are other forms of gambling available as well, none are as problematic as state lotteries. Thoroughbred, harness, and greyhound racing are ancient and noble sports, dating back hundreds if not thousands of years. Still enjoyed by millions of Americans, they offer more sporting and recreational value than just a draw of numbers. While there are compulsive gamblers to be found at the track, they are far, far outnumbered by the casual fan with enough self-control to put a cap on a day's losses.
Casino gambling offers an exciting atmosphere for millions, who plan vacations around Las Vegas and now even Native American casinos like Foxwoods. The stakes are higher at casinos than they are at pari-mutuel tracks, and so gambling losses are more of a problem there. Still, most casino patrons treat the business as a place to enjoy the holidays, not as a part of everyday life.
That is the most frightening part of the state lotteries - the way it pervades our daily life and surrounds us in our daily routine. Buy a quart of milk, a loaf of bread, or ten gallons of gas, and you are sure to be met by a lottery agent. Dog and horse tracks provide thousands of jobs for mutuel clerks and animal trainers. Casinos, too, need to employ dealers and cashiers.
The lotteries, however, make no such employment impact. Lottery agents are paid small commissions, so the lottery business makes no significant impact on their profit. Though the lotteries generate revenue for their respective states, they do so in the form of a regressive tax, stealing money from the working poor with dreams of a big score. While I am not advocating a ban of state lotteries, I do think states should be more proactive in preventing compulsive gambling.
Perhaps they should offer fewer games and be more willing to abandon games that do not draw interest. There is no need for Keno, which turns convenience stores into miniature casinos. High-stakes scratch tickets costing $5 or even $10 are terribly detrimental as well.
Most importantly, states need to spend less time promoting the lottery as a fun, recreational activity and follow the cue of New Hampshire's lottery director. Compulsive lottery players need to be reminded that the odds are against them. And while wagering an occasional dollar or two on Powerball can be fun, wagering the occasional one-thousand or two-thousand can destroy one's life.