The Working Class Lost the $2 Billion Powerball Lottery
- Truthout, Nov. 12, 2022. - Ed.
The staggering $2.04 billion lottery jackpot sold in Los Angeles County made headlines this week, with the ticket holder now holding the title of first lottery billionaire. 11.2 million additional ticket holders across the country also won cash prizes of various amounts. The seller of the winning ticket, 75-year-old Joseph Chahayed, told media that he would split the money among 11 grandkids. The New York Times reports that California public schools will receive $156 million in funds as a result of this big lottery win. While we don’t know details about the $2 bill jackpot winner, most news coverage of the Powerball gives off a feel-good story that encourages regular people to dream of joining billionaires like Elon Musk & Mark Zuckerberg who dominate our news cycle (& our political system).
However, the recent media frenzy over the Powerball has done little to expose the predatory quality of lottery companies or the ways in which lotteries effectively function as regressive taxes.
In a political era in which taxes are seen as antithetical to freedom, & billionaires such as the Musks & Bezos of the world often pay little to no taxes, the funding of socially beneficial public goods already falls disproportionately on the middle & working classes. We know that as a percentage of income, working Americans pay a far greater percentage of their income to state, local & federal taxes compared to the wealthiest Americans. However, the purchase of lottery tickets is overrepresented in lower-income Americans, & those Americans who feel economically insecure. While the majority of lottery tickets are purchased by middle-income Americans, the lowest income quintile of Americans tend to have the highest rate of lottery ticket purchases, & with a greater number of days played.
This is no accident, but rather the conscious marketing decisions of predatory lottery companies, who purposely market aggressively in lower-income communities & communities of color. The impressive potential payout of the lottery, coupled with the relatively low cost of buying a single ticket, can lead to addictive behaviors that can be extremely destructive to already distressed individuals. In addition, as lottery revenue goes toward education funding, oftentimes the benefits are unequally distributed. For example, in some states, lottery funds go to wealthier school districts & higher education institutions, which tend not to benefit the most frequent lottery players.
And some states have merely cut their state allocations to funding education, replacing it with lottery revenues, such as in North Carolina.
But most of the time, lottery taxes go into a state’s general fund, with little oversight on how these funds get used. Thus, states engage in austerity, allowing lower-income lottery players to fund public services that should be funded from a progressive tax.
A recent Bloomberg article declared that the ballooning of the lottery industry represented a failure of state govts. State governments largely own the major lottery organizations, & thus benefit from retreating from the difficult politics of funding the needs of their people. Lotteries serve as a convenient escape from government’s problem of taxation with representation at a time when political leaders refuse to take on the capitalist class. While the state lottery associations do not necessarily have independent political affects, businesses that sell lottery tickets do benefit from sales & have played an outsized role in protecting the industry..
7-Eleven, the store chain, funded the passage of the 1980 Va. Lottery Act. Retailers, through industry organizations, continue to push for greater share of lottery commissions... https://truthout.org/articles/the-working-class-lost-the-2-billion-powerball-lottery/
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but isn't there also an element of Prohibition theory involved here as well? "Protect the poor (and ignorant?) from their own destructive devices .." There was a (long running) debate about whether 'government' should soil it's hands in a sort of 'deal with the devil' - in order to sanction or legalize any sort of gambling at all. And now the argument has morphed to 'alternative, and regressive, form of taxation' - and an even more watered down, "Well, it's raising a lot of money - but the taxes are not going to the right places." And, in the end, doesn't this all boil down to a (shifting) anti-vice argument?
Please note - I don't have any doubt at all that we, as a society, and a country - would be better off without any gambling at all. (sure you can make, piddling, arguments about bingo games and VFW card game - but let's try to stay on track) But can't you also make an utterly convincing argument for the benefit we would derive with the disappearance of alcohol and tobacco from our midst?
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... At this Vegas casino (with the musical fountain outside), while you (slowly) play the online poker at the bar, the drinks are free.
I did the math: down a few drinks, lose a couple bucks at poker. It's a winning combination.
Post-grad was in Computer Science. I couldn't figure out what an advanced math degree would do for me. The computer science degree now helps me muddle through my annual Medicare enrollments 
. With my math degree, I still lose track of the score on the golf course.
