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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

#41

Post by analog31 »

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…

Money is fungible. In the state where I grew up, when the lottery was proposed, it was promised that the money would go to "education." Within a few years, the education budget remained neutral, as the contribution from the general fund was reduced by roughly the same amount as the lottery contributed.

In other words, we got took.

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

#42

Post by codelord »

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…

Yes. Let's make a lottery based economy. That would boost the productivity and make the nation prosperous. This is like fixing a pothole by creating a supermassive black hole.

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

#43

Post by chernevik »

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.

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

#44

Post by iudqnolq »

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.

I disagree on minimal evidence. My intuition is it's more likely you're wrong about what people value than that many people are wrong about that kind of math.

Arbitrage is a real issue, but it's not magic and there's a lot of friction in the real world. For ex, you don't get spam callers trying to buy your chance of a large settlement payout.

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

#45

Post by FredPret »

ISL wrote: post #33
grubbs wrote: post #27

Earlier quoted context omitted.

The commercials I see here for the DC/VA lottery are quite disgusting. I'm "kind of" fine with the state running it. But they should not be advertising on TV.

Washington State Lottery has a slogan, "It's good to play!" It really should be, "Playing the lottery is a pretty terrible idea and we're going to, on average, take your money. If you still want to play, fine, but cheeseburgers really are better than lottery tickets. Wealthy people got wealthy by putting their money into index funds and savings accounts."

... or running lotteries

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

#47

Post by xoa »

"Sin taxes" on self destructive behavior and officially run regulated versions of things which are infeasible to reasonably ban (and the black market "cure" would be worse then the disease) can often be reasonably justified. But every single last one of them should always be completely revenue neutral. All money should be divided amongst the state's residents and sent right back without exception. There's clearly been a long standing temptation to give into the argument of "we'll use this money to make up for the negative effects" but in practice anything that feeds into the general fund directly or indirectly creates perverse incentives that are just too dangerous. Government should take no direct financial interest in whether money from sin rises or falls to zero. That's a big missing piece in a lot of these systems, and the risk of dependence seems similar to that of fines which are often effectively "sin taxes" too. There a number of examples of places [0] which came to depend on fines as a significant source of revenue to run government and in turn took actions to increase the take to great destructive effect.

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0: https://www.forbes.com/sites/nicksibilla/2019/08/29/nearly-6...

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

#48

Post by iudqnolq »

codelord wrote: post #42
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…

Yes. Let's make a lottery based economy. That would boost the productivity and make the nation prosperous. This is like fixing a pothole by creating a supermassive black hole.

Okay, just replace our existing failed welfare system with this then. You don't think there's massive suppressed innovation because so few people can try a startup?

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

#50

Post by bombcar »

mc32 wrote: post #24

Question is, before states implemented legalized lotteries, where did people spend this money? Bookies, horses, craps, betting pools at work, smokey card houses, gambling parlors? Do we make all this illegal, put alcohol, tobacco, prostitution, pro sports and weed into that bucket too. All unnecessary and transfer wealth. On the other hand, yeah, I'm not sure the argument by the state that hey, it's vice, we'll regul…

I suspect some did, some will always find a way.

But all those things take time and effort to access; the lottery is literally available at every gas station in the nation, and most grocery stores, etc.

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