Yesterday, someone won $448 million in the PowerBall lottery. Millions of people bought tickets and went to sleep with dreams of unfathomable wealth and all the good (mostly for themselves) they would do with the winnings. Woke up to crushing disappointment. What’s the harm, really? The lottery gives people a chance to dream big for very little investment. Who can complain? Well, actually all of us should complain, but we don’t because few of us stop to think about what these lotteries are really all about. Let’s take a quick look.

I remember one time, nearly 20 years ago, when one of the first really large lottery prizes was going to be chanced off that night. The local Colorado television stations were covering the ticket buying frenzy and one reporter interviewed this young guy who was in line. He said he had been sent down to the store with $20 by his wife to get diapers, but there was no way that he couldn’t spend that money on a chance to be a millionaire. That’s exactly what he said. Now, it was obvious that his guy didn’t have a lot of money and here he was in line to spend it on a fool’s chance. I couldn’t help think about his wife and baby at home waiting for him to get those diapers. I never forgot that incident.

If you buy a PowerBall ticket, your odds of winning are 1 in 292 million. Another way to look at that is if they gave a ticket to every adult in the US, what is the chance that they would call out your and only your ticket number? Ok, your odds in PowerBall are much worse than even that unlikely scenario. Any individual’s chance of winning the lottery is so infinitisemal that it is almost impossible to convey. And yet, each week millions of people plunk down money to buy these tickets.

In 2015, the most recent year for which I could find annual totals, Americans spent $73 billion on state-run lotteries. $73 billion. $73 billion represents more than we spent on music, video games, books, and sporting tickets combined. That figure averages out to $630 per household nationally. However, when looking a lottery impacts, “average” is meaningless.

5% of lottery players account for 54% of all ticket sales. In other words, 2.5% of US adults spent over $37 billion on lottery tickets in 2015. That would be in the neighborhood of about $5,000 per person spent annually on lottery tickets for these poor schmucks. Many of these individuals are “problem gamblers”. Studies have shown that lotteries are responsible for more gambling addiction than any other form of gambling. Think about that for a  moment – games run and marketed by state agencies are responsible for more gambling addiction than all forms of illegal gambling.

Lotteries should also be considered as a “regressive” tax by states. What is a regressive tax? Simply, a regressive tax is a tax where the burden falls more heavily on the poor than the rich. Lotteries can be viewed as a regressive tax in a number of ways. First, the poor buy more lottery tickets per capita than higher income groups and a much greater proportion of their income is used for this state-sponsored gambling. Second, multiple studies have shown that spending is reduced on nearly all household expenses (food, clothing, rent, etc) for lower income households after lotteries are introduced into states. Finally, problem gambling, which was discussed previously as being closely tied to lotteries, is about twice as prevalent in people with incomes less than $30,000 per year (2.7%) than in people with incomes above $100,000 (1.3%). So, this “tax” falls disproportionately on society’s poor.

Just wait a minute. What are you talking about? Buying lottery tickets is voluntary. This isn’t a “tax” – it’s a purchase. I agree, buying a lottery ticket is not a tax, but the inflated price of the ticket itself can be considered as a tax. State governments are the only organizations allowed to conduct lotteries. Therefore, there is no competition and the result is that lotteries are horribly inefficient. Out of every dollar taken in by a state lottery commission, less than 35 cents is designated for prizes. Approximately 2/3 of the money goes to taxes and expenses. No private concern in a competitive industry could be so inefficient and stay in business. But state lotteries continue to thrive and pay the biggest bonuses to their officials in the history of government. In a competitive lottery world, an individual purchasing a ticket could still dream, but with less waste and bigger prizes.

In a democratic republic, there are essential services that must be conducted by state and federal government agencies and should not be privatized  – police and fire protection, transportation, public health, military, judicial system – the list goes on, but does not include lotteries. There is something so fundamentally wrong about a state agency putting up a billboard advertisement in a poor neighborhood with a picture of a lottery ticket and the slogan “Your ticket out of here.” That’s what we are offering as hope to the poor in this country now? You have a 1 in 292 million chance of getting out of this situation. So, we’re done with education and hard work as a ladder to success for the poor?

The last vestige of possible benefit for society that proponents of state-run lotteries raise is that lottery money specifically benefits some undertaking, like education. No, the money really doesn’t do that at all. When a lottery is introduced into a state, state legislatures suddenly have this seemingly unlimited source of money coming into their coffers. Though a sizable portion of the money might initially be directed into pre-school education (for example), within a year or two the normal funding for pre-school education is moved to other areas and the pre-school proponents find themselves at the exact same place they were before the whole lottery hullabaloo started. (Again, how often in your life do you get to write the word “hullabaloo”? Am I right?) The Stanford Institute looked at lottery funding in state governments and came to this conclusion, “Earmarking lottery funds for education may serve to make lotteries more politically viable, but has no practical impact on budget allocations.”

The end result of all this is that we have state agencies aggressively marketing a known hazard (gambling) to poor communities and to excessively vulnerable populations (gambling addicts) with false advertising that specifically implies a much higher chance of winning large prizes. Whatever happened to “Buckle up for safety” or “Watch out for the other guy”?

I am not suggesting ending lotteries. Let’s just get our government out of this business. The purpose of government should be to enhance and protect people’s welfare, not sell them this fallacy of quick riches. Let lotteries be run by private firms, closely regulated by state and federal governments – simpler and cleaner and there would still be tax revenue for state coffers.

Did I buy a ticket for the $448 million? Damn right I did. Hey, it could’ve been me. Why not? It’s my one chance to escape the Hilton Head ‘hood.