Powerball's dark side

Tonight's lottery is up to $500 million. Guess whose money is going into the pot?

By Natasha Lennard
Published November 28, 2012 3:12PM (EST)
 A customer buys three Powerball tickets at a local supermarket in Hialeah, Fla.,Tuesday (Credit: AP)
A customer buys three Powerball tickets at a local supermarket in Hialeah, Fla.,Tuesday (Credit: AP)

"What we sell is dreams," Colorado's State Lottery director Abel Tapia told USA Today.

Today, Tapia is right -- the dream market is booming before tonight's Powerball lottery which has a jackpot of more than $500 million, the largest ever.

Powerball, which is sold in 42 states,Washington, D.C., and the U.S. Virgin Islands, has not had a winner in two months, rolling over the prize money and culminating in a ticket-buying frenzy today. Americans across the country who do not regularly play the lottery are shelling out for a one-in-175 million chance at Romney riches.

On days like this, when the promise of mega winnings turns the lottery into a news story, it seems its least pernicious. Local and national papers are flush with cheerful tales of comfortable, middle class Americans waiting in long gas station lines to buy a handful of tickets, joining offices pools and spinning cliched yarns about retiring in luxury on a desert island.

"Kathy Rose knew she was in trouble when she woke up at 3 a.m. Tuesday, fantasizing about the celebration that will ensue when her office wins tonight’s $500 million Powerball jackpot," the Kansas City Star reported Wednesday of one local mayor and health clinic worker -- one character in a list of today's excitable dream buyers.

But this is not the day-to-day, week-to-week business of lottery games which rely on poverty, habit and desperation. Studies of lottery ticket sales in North Carolina, South Carolina, California, Texas and Connecticut found that per capita lottery sales are consistently higher in the poorest counties and tickets are more likely to be purchased by unemployed individuals.

Statistics from South Carolina highlight the lottery's reliance on low earners: people in households earning under $40,000 made up 54 percent of frequent players, while constituting only 28 percent of the state's population. Meanwhile, a PBS report earlier this year showed that, for America's very poorest, the lottery is a heavy expenditure: Households that earn at most $13,000 a year spend 9 percent of their money on lottery tickets.

"Lotteries set off a vicious cycle that not only exploits low-income individuals' desires to escape poverty but also directly prevents them from improving upon their financial situations," a 2008 study by Carnegie Mellon's Tepper School of Business noted. The study, aligning with national statistics, found that people who felt poor were found to buy double the number of lottery tickets.

"Some poor people see playing the lottery as their best opportunity for improving their financial situations, albeit wrongly so," said the study's lead author Emily Haisley.

In support of modern lotteries, many point out that they function like a voluntary tax, with money from ticket sales filling holes in government deficits and funding education programs and charitable efforts. But these are regressive taxes on poverty; tickets not only cost relatively more for a poor person than a rich person, but lower-income individuals are also consistently the majority of volunteers for this tax.

Much of the lottery's appeal is pure chance and randomness -- an ostensible great equalizer, when the ticket of an unemployed homeless person has the same odds of winning as that of a millionaire. But as Gordon Giles pointed out in Philosophy Now, in this way, the lottery should by no more celebrated than was the Poll Tax, which provoked mass riots across Britain when introduced by Margaret Thatcher in 1990: "While it may be that every purchaser has an equal chance, the lottery is susceptible to the same charge made against the Poll Tax – that it treated people equally, but for doing so, was not fair. What was despised in that context is now affirmed willingly. The Poll Tax was seen as making the poor pay for the rich, but the same could be said of the Lottery, particularly because ticket sales are highest among the lower paid."

There risks, of course, with a debate over whether the lottery is "good" or "bad" a cheap paternalism and responses to it that are cheaper still. If individuals choose to spend their money on lottery tickets -- even in cases where it seems a bad use of scant resources -- whose place is it to tell them to do otherwise? But to focus on consumer choice (to condemn or support it) would be to miss the basic point: This business of dreams, while almost exclusively framed by the media on jackpot days like today as a frivolous moment of national excitement, is undergirded by poverty -- it relies on it and does nothing to ameliorate the conditions that make poverty a reality.

Natasha Lennard

Natasha Lennard is an assistant news editor at Salon, covering non-electoral politics, general news and rabble-rousing. Follow her on Twitter @natashalennard, email nlennard@salon.com.

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$500 Million Economics Inequality Jackpot Lottery Poverty Powerball