Four lucky ticketholders struck it rich last weekend, but here’s the real winner of the $295 million Powerball binge: the government.
Powerball is a multi-state numbers racket that would be quashed by the U.S. Department of Justice if it were privately run. Instead, the state bureaucrats behind these get-rich-quick schemes are allowed to ban outside competition — including private slot machines, phone betting, instant pull tabs and cardrooms. When it comes to profiting off of the mathematically challenged, you see, lawmakers want the booty all for themselves.
Government-sponsored lottery monopolies in 37 states rake in nearly $40 billion a year. Powerball participants in 21 states and the District of Columbia get 50 cents on the dollar. The feds lend a helping hand by cracking down on other threats to the state lottery industry, such as sweepstakes and Internet gambling. Uncle Sam further rigs the game by exempting state lottery marketing materials from Federal Trade Commission regulations that guarantee truth in advertising. So while government lawyers harass Publisher’s Clearinghouse and Philip Morris for preying on vulnerable consumers with “addictive” promotions and products, states are free to mislead the young, old, poor and feeble-minded about the benefits of lottery games and the remote odds of winning.
The states spend an estimated $400 million a year on publicly sponsored ads promising players that “everyone is a winner” and that you can “win every day” with “more prizes” and “better odds.” To help ensure that lottery ads reach their at-risk target audience, state officials saturate the airwaves around the first of each month. Why? As an advertising plan for the Ohio Super Lotto explained: “Schedule heavier media weight during those times of the month where consumer disposable income peaks. … Government benefits, payroll and Social Security payments are released on the first Tuesday of each calendar month.”
Can you imagine if a tobacco company had a similar marketing plan and got caught with a memo telling ad execs to time their campaigns in order to entice welfare recipients and senior citizens?
If this double standard doesn’t bother you, then the public lottery’s undermining of core American values — hard work, patience, sacrifice and thrift — should. “I have six kids I have to take care of,” Dexter Waiters, 43, told the Associated Press last week. But instead of earning his paycheck the honest way, Waiters joined a group of bicyclists who squandered two hours trekking from New York City’s Central Park to Stamford, Conn., so they could each buy $5 worth of Powerball tickets. “Maybe I could quit my job,” Waiters mused. If he really felt like rolling the dice instead of going to work, maybe he should have just stayed at home and played Yahtzee with his six kids.
Promoters of public lotteries sell their wares as harmless entertainment. They’ve convinced taxpayers it’s all in good fun — and “for the children,” they claim, since most lottery revenue allegedly goes to education. But there is no evidence that lotteries boost school spending. In fact, an investigative report by Money magazine found that on average, states with lotteries spend a smaller proportion of their budgets on education than states that do not have a lottery.
Many states “earmark” lottery funds for other pet causes, from economic development and mass transit to senior citizens’ programs, professional sports stadiums and environmental protection. But state budgeters know earmarking is a sham. All government revenue is fungible. Lottery funds end up supplanting regular income, not supplementing it. As players lose interest, the states must cut the number of prizes, make longer odds, inflate the jackpots and market even more aggressively (and deceptively) to make more money.
In essence, the lottery is a regressive tax on dreamers and dunces. It may be “voluntary,” but the rest of us end up paying, too — in the form of a bigger and more hypocritical government incurably addicted to shell games.
