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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

#151

Post by wildmanx »

Vespasian wrote: post #119
encryptluks2 wrote: post #95

Earlier quoted context omitted.

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.

Why would the state do that? They are making a killing by playing "fair". Unless you are suggesting literal bribery, I don't see it. For some people winning the lottery (even smaller prices) is literally the only "realistic" way of getting a moderate amount of "wealth" When there is an economic crisis, more people are stuck in bad situation and are more susceptible to moderate gambling. News and lotto operators are s…

> For some people winning the lottery (even smaller prices) is literally the only "realistic" way of getting a moderate amount of "wealth"

That itself is questionable. Let's say somebody of poor socioeconomic background wins $100,000 in the lottery. Would they suddenly make reasonable financial choices with that money and "make it"? It's possible. But it would require completely changing the mindset that made them play the lottery in the first place. You know, the "It's a gamble and it's risky, but I feel like it's all about God." mindset. Possible. But unlikely, if you ask me.

This is a poor argument in favor of lotteries. It would be more beneficial for people in those areas to have less incentive to burn their money on lottery tickets, and the money that does get burned go to better education and improving conditions for them to climb the social latter and provide more realistic ways for building wealth. Instead of hoping for God's intervention through lottery wins.

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

#152

Post by afc »

WalterBright wrote: post #139
Dylan16807 wrote: post #137

Earlier quoted context omitted.

> Wealthy people got wealthy by putting their money into index funds and savings accounts. No they didn't. Not with the implied "as an alternative to lottery tickets". You could probably find a handful of very well paid and very lottery addicted people constantly blowing up that income. For 99.99[more 9s]% of people, the cost of lottery tickets is not the difference between getting wealthy and not getting wealthy. Ev…

I know people who have.

Yeah, and I know someone who got rich by buying the lottery. Anecdotal evidence doesn't really prove anything, does it?

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

#153

Post by wildmanx »

missedthecue wrote: post #130
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…

Is it really a tax if it's voluntary? That seems like a contradiction of terms. And why not ban the lottery entirely if you're not going to use it as a revenue source? Keep it around just to entertain poor people? 99.999% of them will still lose money anyway if it's morality you're worried about. Does it really matter to the winners whether they take home $100mm or $70mm (and the gov the remaining $30mm)? It doesn't…

> Is it really a tax if it's voluntary? That seems like a contradiction of terms.

Um, it's not voluntary. Buying the product is voluntary. But the state taking a cut once you do buy the product is not voluntary. Don't mix those two aspects.

It's voluntary to buy a pound of chicken feet. It's not voluntary to pay VAT on that purchase.

It's voluntary to go to work and earn a salary. It's not voluntary to pay income tax on that salary once you earn it.

> And why not ban the lottery entirely if you're not going to use it as a revenue source? Keep it around just to entertain poor people?

One reason is to keep a legal way to do this, since otherwise illegal ones have higher demand and pop up. It's more expensive (and arguably worse for society) if you make gambling entirely illegal and instead need to go hunt down illegal lotteries with more police resources.

> 99.999% of them will still lose money anyway if it's morality you're worried about. Does it really matter to the winners whether they take home $100mm or $70mm (and the gov the remaining $30mm)?

You clearly don't play the lottery (and I don't mean that negatively). Most wins are small. $400 here, $2000 there. That's how you keep people hooked. And in those orders of magnitude, it makes quite a difference in practice.

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

#154

Post by WalterBright »

afc wrote: post #152
WalterBright wrote: post #139

Earlier quoted context omitted.

I know people who have.

Yeah, and I know someone who got rich by buying the lottery. Anecdotal evidence doesn't really prove anything, does it?

80% of American millionaires are self made.

https://www.amazon.com/Millionaire-Next-Door-Surprising-Amer...

Consider also that the US was populated by people who arrived with nothing. It wasn't wealthy people that came here from Europe.

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

#155

Post by fsckboy »

ISL wrote: post #123
atwood22 wrote: post #99

Earlier quoted context omitted.

> 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.

On average, yeah, I think so. It would then be a way to say that money has non-linear utility, which is probably true. An aggregated million dollars probably does have more utility than a million single dollars. Such an institution would be difficult to administer with zero operating costs, though.

> An aggregated million dollars probably does have more utility than a million single dollars.

no, it's the exact opposite, there is a declining marginal utility to money. Think of it this way, homeless person gets a dollar, that's some food for the day. A second dollar is better, but it's not as valuable as that first dollar, but the second dollar is worth more than a third dollar; all the way up to Bill Gates, how much does he care about a dollar?

It's an important concept because it underlies attitudes about and mathematics of risk: even in a fair lottery, the pain of losing money is greater than the thrill of winning some, as an aggregate across the population. It's fundamental to the stock market, and the insurance industries, which exist because of the asymmetry of up vs down, but operate on the aggregating of millions of single dollars.

btw, I'm not meaning this casually, people won Nobel prizes for figuring this stuff out

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

#156

Post by yunohn »

iudqnolq wrote: post #147
yunohn wrote: post #146

Earlier quoted context omitted.

Do you have any real evidence that poor people would prefer a 1/300M chance in winning the lottery versus a guaranteed paycheck for their monthly expenses? I would love to see the proof for your assertion.

No, that sounds highly implausible to me. A guaranteed paycheck of $1,000/month to every American (in current USD) would be way better than what I suggested. This idea presumes scarcer resources. I'm talking about something more like the difference between a 1/10 chance of $1,000/month for a year with a new drawing in a year vs $100/month for a year every year.

Even with those odds, I still don’t believe any poor person would prefer a lottery over guaranteed income. Your scenarios sound like projection/speculation than realistic to me.

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

#157

Post by Vespasian »

wildmanx wrote: post #151
Vespasian wrote: post #119

Earlier quoted context omitted.

Why would the state do that? They are making a killing by playing "fair". Unless you are suggesting literal bribery, I don't see it. For some people winning the lottery (even smaller prices) is literally the only "realistic" way of getting a moderate amount of "wealth" When there is an economic crisis, more people are stuck in bad situation and are more susceptible to moderate gambling. News and lotto operators are s…

> For some people winning the lottery (even smaller prices) is literally the only "realistic" way of getting a moderate amount of "wealth" That itself is questionable. Let's say somebody of poor socioeconomic background wins $100,000 in the lottery. Would they suddenly make reasonable financial choices with that money and "make it"? It's possible. But it would require completely changing the mindset that made them pl…

Of course it's a poor argument and your arguement points in the right direction (though I don't have enough data to confidently make a statement about peoples ability to manage their finances)

But people like to dream and everybody knows that someone wins the lottery.

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

#158

Post by TimPC »

WalterBright wrote: post #154
afc wrote: post #152

Earlier quoted context omitted.

Yeah, and I know someone who got rich by buying the lottery. Anecdotal evidence doesn't really prove anything, does it?

80% of American millionaires are self made. https://www.amazon.com/Millionaire-Next-Door-Surprising-Amer... Consider also that the US was populated by people who arrived with nothing. It wasn't wealthy people that came here from Europe.

This number is going down with every home inheritance and isn’t stable across generations. It’s largely a function of homes being bought for low values appreciating to over $1 million and not a function of labour markets.

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

#159

Post by soulofmischief »

dillondoyle wrote: post #136
ddtaylor wrote: post #3

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

I can't be the only one here who buys them. I make good money. They're only $2. The 5 minutes I spend walking to the office after buying one spent thinking about what I would do with ___ is worth it. Yes, I know the math and am under no delusion about winning. I'm more likely to die trying to avoid the shitty drivers on this walk. It's day dream entertainment!

Then maybe you don't follow under the demographic of "needy"

My mother also spends $2 on them. Sometimes a couple times a day. She also compulsively gambles and has endangered my life before trying to satiate the urge.

I also grew up absolutely dirt poor, she was homeless half the time, but two unwavering constants in her life have been cigarettes and gambling, and they are far from unrelated when speaking of industry motivations. These industries have ruined my relationship with my mother, severely impacted my own quality of life as a knock-on effect, and I'm far from the only one.

Keep buying the tickets. But you can't justify the state of the industry today because you're not the one caught in its net.

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

#160

Post by TimPC »

fsckboy wrote: post #155
ISL wrote: post #123

Earlier quoted context omitted.

On average, yeah, I think so. It would then be a way to say that money has non-linear utility, which is probably true. An aggregated million dollars probably does have more utility than a million single dollars. Such an institution would be difficult to administer with zero operating costs, though.

> An aggregated million dollars probably does have more utility than a million single dollars. no, it's the exact opposite, there is a declining marginal utility to money. Think of it this way, homeless person gets a dollar, that's some food for the day. A second dollar is better, but it's not as valuable as that first dollar, but the second dollar is worth more than a third dollar; all the way up to Bill Gates, how…

What’s the utility of being in a different economic class? There is more to money than just spending it and I’d argue there are large utility gains from crossing class boundaries. The academic models ignore any utility except spending and don’t even adequately account for things like more expensive high-quality goods being cheaper in the long run. So I don’t find this utility argument that proven or convincing.
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