When Powerball jackpots get high enough, media coverage immediately increases. People who regularly don’t play, start buying tickets. It drives up the jackpot even higher. Then eventually, someone wins. We go on with our lives. The extremely low probability of winning a jackpot is what most people discourage from playing regularly. Still, lotteries even exist because of the people who rely on luck and not on the certainty of earning money.
Which is the reason lotteries can offer those insanely high prize pools. But some people get addicted to it, not really thinking about how much money they are spending for an awfully low probability of even getting their money back. These are the kind of people who visit the stores all the time, spending thousands of dollars on lottery tickets.
People buy tickets for hundreds of dollars repeatedly until they win, and then they win just about what they already put into it. Still, the sensation of winning gets them, so they buy other tickets until they run out of money and lose all the bets.
Most of the lottery tickets are sold in poor neighborhoods
Statistics show that people with higher income don’t play daily lottery games as much as people from lower income neighborhoods. People in poor neighborhoods spend more money on lottery tickets and even more often. This could be because poorer communities tend to be located in urban areas that have more stores selling lottery tickets.
But even in cities, where this does not apply, we can see that most of the lottery wins are actually from poorer households.
That indicates that poorer on average do spend more money on lottery games than wealthy people.
2. Most of the lottery tickets are bought in places with more minorities
Nationwide perspective shows us that African Americans spend around five more times on lottery tickets than white people. There are some places with minority populations in Connecticut that are inclined to have more lottery ticket sales than other places.
Towns with a higher percentage of minorities also tend to have a higher unemployment rate, poverty, and other unpleasant indicators.
Powerball isn’t the real problem. The problems are smaller games.
A much more economically variegated population plays the Powerball versus the daily games — mainly when the jackpots become higher.
Store owners say that people usually start with a Powerball ticket, but since the odds are too low, they eventually start buying more. Then they start buying daily lotteries, which makes them win some lower amounts from time to time, and the addiction begins.
Lower prize pool lottery games are just way easier to get addicted to. To make people addicted, people have to get the satisfaction of winning. This especially applies to people from poorer neighborhoods, that want to get some kind of gratification after a rough day.
Many people in financial trouble think it’s the only way to make money
One in five Americans thinks that the only way to become wealthy is through winning a lottery. This might indicate that people are not so good at math or naive, but it’s also a desperation mark.
During the Great Recession, more than half of the US states recorded an increase in lottery ticket sales. In 42 states, 25 saw a spike in an instant and daily games. What’s even crazier is that one study found out that 15 percent of millennials say that winning a lottery is their only hope for retirement savings.
It may sound like a joke, but the authors of the study wrote that millennials have different challenges to say they have to deal with. One is that one day they’ll have to take care of their parents, which is financially very demanding.
Also, it is hard for Millenials to buy their own property since living costs are so high in most big cities. Another challenge is that they feel Social Security will provide them with a very low income by the time they retire. The survey also found that 28 percent thought they wouldn’t be able to retire when they want — and another 28 percent even think they will never be able to retire.
We can admit the lottery preys on poorer people, with insecurities related to the future.
It is easy to think of lottery games as a fraud, that eats money of a lot of people and only gives back to a few selected individuals.
But for people who are experiencing hard times in their lives, is it an opportunity for a better life. And for many, it seems to be the only possible way to get out of their current situation.
Why is it legal?
But the real question is: why do states allow the poorest people to do this to themselves? The lottery is an enormous source of income for a lot of states. Connecticut is about to legalize Keno. It is a lottery game similar to Powerball, but that draws a winner every five minutes. For a state that is in deficit, it is an easy way to make a profit. This particular game should bring around 30 million dollars in the next year. That is around 2 percent of revenue that comes from the Powerball.
The Myth Of Lottery-Fueled Education Funding
States usually say that the revenue from lottery games will get invested in fields to help the community, like education. But that often does not happen. For example, Georgia and New Mexico promised to create new scholarship programs, but then quickly disbanded the idea, due to high demand. This is what normally happens. States often higher the expenses on education right after the lottery, but then, in the long run, lower it down again. On the other hand, states without lotteries spend 10 percent more of their education budgets than states with lotteries.
The problem with lottery revenues is that it is hard to predict, and it’s simple for lawmakers to move the money from priorities like education to anything else.