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State lotteries transfer wealth out of needy communities, investigation finds

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Re: State lotteries transfer wealth out of needy communities, investigation finds

#91

Post by riffraff »

cat_plus_plus wrote: post #86
chernevik wrote: post #43

Earlier quoted context omitted.

Came here to say exactly this. People will play numbers games organized by the mob, so it does make sense to give them an honest game and keep the money from crooks. But the state take should be small. And absolutely no advertising.

Mob, let alone legal casino operators, would never get away with such ridiculous margins. Even organized crime faces competition from unorganized crime, your neighbor's home poker game will probably have a pretty low rake.

When I was a kid sport betting was illegal in Italy, and almost everyone I knew played illegal sport bets.

But we also had legal national Lotto[0], and _illegal_ Lotto betting with about the same margins.

And when sport betting got legalized, the odds given where about the same as the illegal one, until the latter de facto disappeared.

So, I'm not sure the mob would not get away with Lottery margins.

[0] the traditional Italian lotto is a betting game: you bet that 1-5 numbers will come out of an extraction, but it's up to you to choose how risky a bet and how much you bet, e.g. getting one number pays 11:1, 3 numbers gives you a 4500:1 etc

Re: State lotteries transfer wealth out of needy communities, investigation finds

#93

Post by kornhole »

Lottery is a tax on people who don't understand probabilities and those who need something to hope for. Basically it taxes the poor. It makes many of these already poor people poorer and a very few richer. This has been known for decades or more. The results of the investigation are consistent and no surprise.

Re: State lotteries transfer wealth out of needy communities, investigation finds

#94

Post by Tozen »

ISL wrote: post #28
iudqnolq wrote: post #19

There's an interesting theory that the solution to this is to subsidize the lottery and improve the odds significantly. Take to the extreme and you could essentially implement UBI this way. I also don't think poor people are wrong to think a chance of getting a life-changing amount of money is a worthwhile luxury spend compared to the other available options. They may be wrong about the probability, but instead of fi…

If playing the lottery becomes worthwhile, arbitrageurs will immediately step in until it isn't. Got a lottery ticket with a 10% chance of being worth $100? I'll give you and each of your friends $8.50 for them, guaranteed, today. Lotteries penalize people who are bad at math. It really is that simple.

You seem to be also missing the point of these lottery retailers being disproportionately clustered in the poor Black neighborhoods. The "math problem" also involves pushing the distribution of the "vice" off on them (where such people are more desperate to escape their circumstances), then negating any overall or possible benefit to those poor Blacks that don't have such a vice (like kids) and need greater educational funding and opportunities.

Re: State lotteries transfer wealth out of needy communities, investigation finds

#95

Post by encryptluks2 »

chernevik wrote: post #43
david2ndaccount wrote: post #11

The argument for the state having a monopoly on lotteries is that if there wasn’t a legal lottery illegal lotteries would proliferate. Thus to protect people, the state should run it as it would then be guaranteed to be fair and free of the criminal element (mobsters, etc.). Ideally, the lotto would just take in enough to pay the winners and administrative expenses. However, most states have abused this monopoly and…

Came here to say exactly this. People will play numbers games organized by the mob, so it does make sense to give them an honest game and keep the money from crooks. But the state take should be small. And absolutely no advertising.

I'm still not convinced that some lottery winners aren't preselected. I get it, that it is supposed to be auditable and resistant to cheating but wouldn't be the first time a large gambling system has been found to have issues. It also seems like whenever there is some financial crisis happening that Powerball and Mega Millions always go up and it gets talked about in the news.

Re: State lotteries transfer wealth out of needy communities, investigation finds

#96

Post by Tozen »

femto wrote: post #40

It's true of gambling in general. A case study is the state of New South Wales in Australia: the state with the most poker (slot) machines per capita [1], in the country with he most poker machines per capita [2] (excluding gambling specific destinations such as Macau and Monaco). One poker machine in NSW for every 82 people, with an average loss of AU$1000 per adult per year. The losses (called profit for the hotels…

Very good points.

Re: State lotteries transfer wealth out of needy communities, investigation finds

#97

Post by Tozen »

witheld wrote: post #4
ddtaylor wrote: post #3

In some places the local state lotteries are called the "dummy tax"

Well based on this it should probably be rebranded a “desperation tax”

Exactly. It's not a situation of well off people going somewhere to spend extra cash, as it is exploiting desperate people hoping to find some miracle to escape their circumstances, by shoving a negative vice in front of them.

Re: State lotteries transfer wealth out of needy communities, investigation finds

#99

Post by atwood22 »

ISL wrote: post #36
mullingitover wrote: post #29

Georgia's lottery[1] is overall a pretty decent system, all things considered. > the lottery takes in over US$1 billion yearly. By law, half of the money goes to prizes, one-third to education, and the remainder to operating and marketing the lottery It pours massive amounts of money into Georgia's education system. It's not perfect but it has put hundreds of thousands of students through school. If we must transfer…

Generally when lotteries "fund education", it can enable legislatures to allocate tax money that had previously gone to education to other priorities. This shift can turn lotteries into a de facto tax on being bad at math.

> This shift can turn lotteries into a de facto tax on being bad at math.

Would lotteries be ok if the expected value of the players prize equaled the price of the ticket? Being bad at math and lotteries being a regressive tax seem orthogonal.

Re: State lotteries transfer wealth out of needy communities, investigation finds

#100

Post by absherwin »

bogomipz wrote: post #57
absherwin wrote: post #18

There's a simple answer: Offer a lottery with a high payout rate and flatten jackpots to the extent they don't cause a shift into other worse sorts of gambling. The total amount of money transferred to support government programs makes up less than 0.5% of total government revenue; it's trivially replaceable.

>"Offer a lottery with a high payout rate and flatten jackpots to the extent they don't cause a shift into other worse sorts of gambling" What is meant here by "flattening" jackpots? And how does it help?

If we assume the main problem with lotteries is that they make some people poorer, we need to solve two things: The payout being less than the cost due to both high overhead and transfers and the payouts tending to concentrate wealth since even in a lifetime of play few win the largest jackpots.

One can't make them too flat because consumers like large jackpots which is why they've grown over time and become harder to win. Presumably there's a level below which consumers would switch to other types of gambling regardless of legality.

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