The Lottery is a Tax on People Who are Bad at Math

Lottery is a Tax on People Who are Bad at Math

The odds of winning Powerball is one in 259 million. For Mega Millions, it’s one in 292 million. For most people, these numbers are beyond actual comprehension. The only way to win the lottery is not to play at all. The lottery is a tax on people who are bad at math.

Lottery is a Tax on People Who are Bad at Math -- Lee Legal

People play games because they’re fun, and because you occasionally win. But you will never, ever win the Powerball or Mega Millions. There can be no joy in playing because there is no chance of winning. So why do people play?

The psychology of the lottery

The average American spends $223.04 on the lottery each year. Powerball and Mega Millions tickets both cost $2 apiece. Most customers purchase more than one ticket. And most customers of lottery tickets buy them regularly, over the span of years. No one would willingly invest thousands of dollars with zero chance of return. But that is exactly what lottery players do.

Still, players can justify playing because the cost per play is so low. It may seem like a cheap form of entertainment until you calculate the total sum spent over years.

Seeing news stories about the winners also contributes to what economists call “availability bias.” We think it’s more likely that we can win if we hear about someone else winning. Seeing other people buying tickets and hearing about how much money the grand prize is worth whets our greed and grows the prize. Meanwhile, no matter how big the prize or how many people play, our chances of winning remain infinitesimal.

It’s fun to play a game if you have a chance of winning. But I guess a lot fewer people would buy a lottery ticket if the rule was “pick a number between 1 and 300 million.” You have a statistically insignificant chance of winning the lottery. In fact, you have no chance of winning. You should not play the lottery.

The lottery is a tax on people who are bad at math

Poor people play the lottery.

The link between lottery sales and low-income purchasers
has been fairly well established.
In 2004, three Cornell economists reviewed
10 years of data from 39 states and found
a strong correlation between lottery sales and poverty rates.

Powerball profits,
NBC News

Poor people play the lottery and poor people lose. So where does the money go?

About 60 cents of every dollar spent goes to the winner. Some goes to run the lottery. The rest goes to the states in which the tickets were sold. In fact, politicians have become dependent on lottery money. The lottery is actually an ultra-regressive tax on poor people.

Not all poor people are bad at math. Yet the economics of the lottery, money paid by taxpayers to the state, make clear that the lottery is a tax on people who are bad at math. Lotteries offer nothing but false hope and less money for those who need it most.

About Brian V. Lee 566 Articles
Brian V. Lee provides bankruptcy, foreclosure defense, business turnaround, and litigation services to clients in the District of Columbia, Virginia, and Maryland. Brian was the Washington, D.C. state chair of the National Association of Consumer Bankruptcy Attorneys from 2016 to 2018.