Bloomberg News released a brand new “Sucker Index” today. It created the Sucker Index with 2010 data from the US Census and annual reports from state lottery commissions. The total dollar amount of prizes awarded was subtracted from ticket sales, and then the difference was divided by the total personal income of each state’s residents.
While many are demanding the rich should pay higher taxes, instead government continues to shift more of the burden to The Lottery Class.
Massachusetts came in #2 nationally for playing its citizens for suckers. The possible addition of casinos and state lottery internet gambling may allow the state to capture the top spot next time. Click here to see Bloomberg’s two page PDF of its rankings.
The Suckers Index did not include perhaps the biggest “sucker” factor about government’s gambling program of state lotteries and casinos: most gambling operators and public officials who support them rarely gamble themselves. They are “The Smartest Guys NOT in the Room.”
Les Bernal
but would love for a scratch off ticket where the winner got $20k of PV installed on his home. But I digress.
It seems to me that the least the lottery could do is ensure that it’s contracts go to in-state when possible. I’m talking about everything from printing the tickets to supplying the machines to hiring ad agencies to advertising buys. So long as we’re going to suck money from our (rarely wealthy) gambling addicts, we might as well spit it back out to other people in our own state instead of spitting some of that overhead cost to Madison Avenue or ClearChannel, etc.
State lottery agents like Papu Patel and his employee G2/Jitu/Gitu are fine, but I’m fed up with Moneer Guirgis and his hawking a novelty farce item hanging over his main counter. Anyway, after all the irritation, Love Walks In.
At least they will attack this imbalance and increase the payouts/reduce the amount of money we are all losing.
Joking aside, the reason why state lotteries like Massachusetts offer such high payout rates is because it “juices” the scratch tickets: if players win more money and win more often, then sales increase because players buy more tickets. Most players don’t pocket the extra winnings and take them home. They plow those winnings into buying more tickets. The end result is the lottery gets the player to spend and lose more over time than they would have otherwise.
While slot machines in a casino offer higher payout rates, the cycle is similar to one described above scratch tickets. Slot machines are played much faster and much longer than scratch tickets- a slot machine can be played 600 times an hour for several hours at a time, several times a week. The net result is the financial loss per visit is higher.
With casinos, The Sucker Index does not even apply. They need their own index: “The Played to Extinction Index” – (“play to extinction” is the phrase used by some gambling operators to describe the strategy to get a player to lose all the money they came with) – which measures the amount of citizens who have lost all of their money.
Les Bernal
If I lose a couple dollars on a ticket I’m at least comforted in knowing my money is going to help cities and towns. There are legitimate concerns about casinos, but bashing the lottery makes us sound like a bunch of scrooges or Puritans.
The lottery is just as predatory as casinos, is just as regressive, and has all the same harmful effects. Exploiting the desperate and poor is what it is, whatever the plunderer does with the resulting proceeds. It’s like arguing that spouse-beating is ok so long as the abuser does good deeds in the community.
It would be better for the Commonwealth to raise the taxes on everybody to collect the $4.4 B raised by the lottery, and then return $3.2B to randomly-chosen taxpayers based on taxpayer IDs (I’m using the numbers from the Bloomberg piece).
That generates the same revenue, causes some number of taxpayers to feel lucky, and doesn’t exploit the weakness of anybody. Any taxpayer who genuinely objects to receiving the payout can, of course, donate to their favorite charity (including the Commonwealth of Massachusetts).
Since no reliable statistics are kept on “desperation” to the best of my knowledge. Maybe you just mean “poor?” If that is the case, there are lots of things that poor people buy relatively more of than more affluent people. Should those also not be offered for sale?
The research is overwhelming that poor and many desperate people lose enormous sums on the lottery.
This New York Times story on Yale University’s Emily Haisley study “Why Poor People Play the Lottery Even More When Times Are Tough” goes right to the heart about the desperation factor.
In 2010, Sarah Ovaska of the left-leaning North Carolina Policy Watch details how the most impoverished counties in North Carolina spend the most money on the state lottery in her report titled: “Hope and Hard Luck: Poorest Counties Lead State in Per Capita Lottery Sales.”
This 2008 study from The Journal of Risk and Uncertainty highlights the fact that the lottery appeals to people earning lower incomes and that these individuals spend a disproportionate amount of money on the lottery when compared to people with higher incomes.
And in 2007, The California Budget Project, in an analysis of the possible privatization of the state lottery, reported that the poor, non-white, urban and less educated spend a higher portion of their income on the lottery than other demographics.
Lotteries and casinos are the most predatory money-making operation in America today and unlike the Bank of Americas, they get away with it because they are a government program. Government is so desperate for the revenues that many well-intended people simply turn their head and look away.
Les Bernal
I live paycheck to paycheck. The prospect of getting rich quick for a mere dollar is at least as appealing to me as the next guy. Yet, I’ve never played the numbers and only rarely “splurge” on a scratch ticket. The Lottery does not exploit me, because I DONT LET IT. I’ve always found the implication that those without means just can’t help themselves rather patronizing.
Those weaklings who play the lottery or spend hours at the slots when they already don’t have enough money, or have sex outside marriage obviously deserve whatever consequences that result. Government should not stand in the way of those corporations who wish to
exploitprofit from those people, or do anything to protect those people from those consequences. In fact, government should assist those people in at least some of their self-destructive behavior, because – well, because Christopher can resist, so obviously they can, too.Your use of the word patronizing is freighted with irony.
those people are sluts. 😉
… disproportionately, come from the wealthiest families. They just have a much larger margin in which to screw up and suffer the consequences. That, in fact, might be a perfectly serviceable definition of ‘wealthy’…
On the other hand, I’ve known lower class peoples (aka ‘the poor’), some of them members of my own family, who spend their free time getting sputtering drunk at casinos and racetracks and playing poker but who, nonetheless, summon the will to show up to any of their three jobs on time and sober. When they do win at the lottery, or the racetrack or any of the other probabilistic pursuits, they end up plowing most of it back into a nice car and more liquid weekends. It actually takes a lot of will to be a functioning addict in the lower class. And it actually happens, as Christopher very ably puts it, that they play the odds, sometimes very close to the margins, by choice. Very few are unaware of the consequences and very few of the ones I’ve known, when faced with the consequences, didn’t ‘man up’ and accept them. When you face narrow choices, the ones you get to make often assume greater poignancy.
But the consequences almost always, in the end, catch up with them precisely because there is so much less margin for error. There’s a certain bravery, and strength of will, to getting up every day to go to any one of several jobs that aren’t going to improve.
That’s why I think we should plow every last penny into education and in increasing choices available to people instead of exploiting the narrow set of choices they have now.
Shame. Exploiting people is awful, our Commonwealth should be better than that.
Until the government starts forcing people to buy tickets I stand by my comments. The government can and should educate as to the consequences and institute appropriate regulation to prevent fraud, etc., but nothing wrong with simply having the opportunity. BTW, I see nothing weak about OCCASIONALLY playing the lottery.
I’ve always found you to be one of the more reasonable (and thoughtful) posters on BMG, and that’s not necessarily untrue in this case. But the issue really isn’t whether citizens can responsibly play the lottery (or patronize casinos) recreationally. The issue is whether it is responsible (or ethical) to use this as a means of financing government.
I think it’s perfectly clear, and widely accepted, that people of lesser means disproportionately participate in these pastimes – usually to their detriment. So I can only infer that Gov. Patrick’s philosophy is that we need casino gambling in Massachusetts to siphon dollars away from those who can least afford it, so that we can turn around and give some of it back to them in the form of expanded social programs.
Now THAT’s what I call patronizing.
Christopher, presumably you support barring children from participating in legalized gambling. Also presumably, your reason for that is that children are insufficiently able to judge whether it’s a good idea to sink their entire allowance into lottery tickets. I submit that the ability to judge that is not universally present in the adult population, either. In fact, it appears that quite a large number of adults have a problem discerning their own best interests with respect to gambling. Why do we protect one group from their weakness by prohibiting them from gambling, while actively encouraging the other group? Are developmentally disabled adults, for example, fair game?
Perhaps I’m wrong in one of my presumptions. if so, please do correct me.
We’re going to be really busy saving people from themselves. Are we banning cigarettes? Alcohol? Twinkees?
What about taxes on addictive behaviors, are we getting rid of those as well?
There is no need to ban Twinkies. Hostess has declared bankruptcy.
Cigarettes and alcohol are already prohibited to children, and in the case of the former, much of the heavy tax burden on them is spent in a very effective educational campaign discouraging their use. I would welcome a similar campaign on gambling.
The government does not collect revenue by manufacturing and selling cigarettes, alcohol, or other addictive substances. The government does not (to my knowledge) promote their use in order to increase tax revenue.
I don’t understand why subtleties like this seem to be so hard for some of us. In my view, there is a world of difference between allowing something and actively creating, promoting, and profiting from it.
The lottery is a terrible way for the government to raise much-needed tax revenue.
My really small brane has a hard time with such subtleties. I thought when Kirth said, “I submit that the ability to judge that is not universally present in the adult population, either. In fact, it appears that quite a large number of adults have a problem discerning their own best interests with respect to gambling,” what he meant was that the government should be in the business of protecting fully grown, otherwise healthy and capable people from engaging in what he deems to be behavior that is not in their best interests.
I did not equate sin taxes to the lottery, but I was curious how far Kirth would suggest we go in our quest to prevent people from doing things that Kirth deems to be harmful. I took his comments to mean that he thought adults should not be able to gamble because some adults cannot “discern their own best interests with respect to gambling.” Is that Kirth’s view? If yes how does he feel about other behaviors that many adults engage in that pretty clearly are harmful to them and those around them? Should the government pass a law to ban all behaviors it deems similarly destructive?
And Tom, just to clarify, are you a proponent of government taxing addictive behaviors relating to tobacco and alcohol?
No, your brane let you down by thinking that. It’s not what I meant, particularly since the people I was talking about are not – to use your word – capable. There’s a clue to what I meant in this sentence: “Why do we protect one group from their weakness by prohibiting them from gambling, while actively encouraging the other group?”
Please explain to whom “quite a large number of adults” in the “adult population” refers. You are comparing the treatment of this group to the way we treat children and clearly I’m not getting the point of the comparison.
I’m sorry if my assumption that the term was generally understood and easily to find a definition for was mistaken. Here:
Perhaps you think that any adult who’s able to enter a convenience store and pass money to another person is capable of judging whether it’s a good idea to spend all of that money on lottery tickets. If you do, you’re wrong. Again – why is it OK to encourage those people to do that, when we prohibit children (some of whom are highly capable) from having that opportunity?
The government allows cigarettes. RJ Reynolds manufactures, promotes, and profits from them. Are you really saying that you are unable to discern the distinction between the government and RJ Reynolds? Now that the distinction has been identified, are you having trouble comprehending it?
If you didn’t intend to equate “sin taxes” to the lottery, then why did you introduce cigarettes, alcohol, and Twinkees to the conversation?
Yes, I’m perfectly comfortable with the government taxing behaviors it chooses to limit — cigarettes and alcohol among them.
sin taxes and the lottery, I did not equate them. I get the difference between the government being the bookie with respect to the lottery and levying a tax on certain products. It’s not the same to tax a behavior vs. being in the business directly. But there are some similarities. Both raise public funds on the backs of addicts.
As stomv observed elsewhere here, a better analogy is prostitution, loan-sharking, human trafficking, and for that matter drug-dealing. Those are all activities that society, in the form of government, chooses to restrict because of their devastating impact on the public good. Gambling has always been among them.
The difference between taxing and actively promoting these activities is the “subtle” distinction that matters. The government does not, so far, act as pimp, enforcer, trader, or pusher. It should not also act as bookie.
Clear enough?
You’re ok with the government imposing sin taxes, but don’t think it should be in the business of selling sin directly. Of course, such a view implies that you’d like to see the lottery privatized and have the government collect a tax on ticket sales rather than the current set up.
Good effort at putting words in my mouth.
I think that gambling belongs in the category of prostitution, loan-sharking, drug-peddling, and human trafficking. The activities should be illegal, and the government should use its resources to limit them.
You seem to forget that I oppose both the lottery and casino gambling. In my opinion, both should be illegal.
there were legislation proposed to a) privatize or b) repeal the lottery, if a passed and b didn’t you would think that an improvement over the current state of affairs, even though it would likely significantly reduce revenues to the state and would enrich some private operator.
And you don’t think tobacco and alcohol belong in this discussion because why?
oops
and that means stopping destructive behaviors that threaten the enjoyment of the Sun for as long as possible.
Developmentally disabled adults is admittedly an interesting question. I guess my inclination is to say that if they are considered competent to earn their own money and manage their own bank account without a cosigner then they can do what they want with their money. Outside of that specific criteria I do presume that being an adult means being a rational being and it’s not for us to regulate against their own stupid mistakes. Sure it’s a bit arbitrary; age distinction always is. (Really, what is the scientific reason to allow someone who is 21 year, one day old to purchase alcohol, but not someone who is 20 years, 364 days old?) Even then there is judgement. Technically it’s illegal to sell a raffle ticket to a minor for some charity door prize, but if a teenager hands me a dollar for such a ticket at an event I’m not likely to make a stink.
Massachusetts has the most generous payouts of any state and yet still comes in #2 only because people here play more than anywhere else. Our “suckertude” is a comment on how popular the lotto is here, not on it’s rip-offishness.
The lotto is so popular in Massachusetts precisely because we Massholes are such suckers.
So, your complaint about the Sucker Index is what now? Let’s take another look at the facts:
1) Massachusetts has the highest payout of any state (at 72%). Meaning, the lottery keeps “only” $28 per $100 spent on “playing” the lottery. Less of a total “rip-off” than other states but far worse a use of one’s money than virtually any other. Putting one’s money under the mattress has a 100% pay-out.
2) Massachusetts spend an extraordinary amount of money per adult on the lottery. An average of $861 per year, per person. Nearly double Georgia and far more than in any other state.
3) We are a relatively rich state, yet we still spend 1.3% of our personal income on the lottery. Far more than second place Georgia and nearly twice as much as any other state. Any other state.
So, yes, our higher payout does make the Georgia folks slightly bigger suckers. They spend $470 a year (1.0% of their income) on the lottery despite getting back on 63 cents on the dollar.
But, Massachusetts residents are the easily the second biggest suckers. Precisely because of “how popular the lotto is here.”
The lottery – even with out 72% pay-out – is still a tremendous waste of money. A “sucker” bet that dwarfs even legendary sucker bets like the slot machines. Las Vegas law requires slots to pay-out no less than 75% and most pay-out at far higher rates (90-95% is typical). Black-jack and most casino games, if played even remotely correctly, pay off in the high 90s as well.
The fact that Massachusetts residents continue to shell out over $860 a year on average to a system that pays-out so poorly still amazes me. The power of advertising and convenience I guess. SUCKERS!
That’s a remarkable statistic, really. I mean, I sure as heck don’t spend anywhere close to that, and I know I’m not alone. So the ones who play a lot must really be playing A LOT.
…are financing gazebos in Weston.
The lottery operates overtly as a regressive tax, premised upon expanding gambling addiction in poor and working-class communities. I remember reading somewhere (I’d appreciate it if someone out there could send me the cite.) that, due to its advertising, the Massachusetts Lottery generates the highest per capita percentage increase of gambling addicts of all the fifty States.
Clearly we should ban the lotto and let the mob go back to running it. I’m sure they will offer much better odds than the state! Imagine all the good wholesome things they can spend the proceeds on! Nothing shady like schools or healthcare or aid to cities and towns…
Since we don’t want to take the high road on anything, we should also go back to state-run businesses for prostitution, human trafficking, and high interest loans. After all, the state’s banned those things too, and the mobsters on every corner are living fat.
Because, you know, we aren’t capable distinguishing between selling human beings and selling lottery tickets.