By Rich Sena
KCRP Legislation Chairman
By now we should have learned if there were any winners in this week’s $1.3 billion “Powerball” jackpot that captivated much of America.
I myself got caught up in the act, as I waited behind ten people in line at a local convenience store, with most shoppers not purchasing gas, milk, or a newspaper, but opting only for a chance at winning the large bonanza.
This got me thinking as to why exactly Texas, or any other state for that matter, is in the gambling business. The reasoning goes back many years, as states were looking for new ways to fund government programs. Quite often states would promise that all net proceeds would go to education, a worthwhile cause, but somehow those lines of dedicated funds have often become blurred and the money just ends up funding overall government growth.
Another rationale was that government run gambling was preferable to that controlled by organized crime, long the dominant player in games of chance. I guess states decided that if you can’t beat them, join them.
As we know, both illegal and legal gambling existed long before state lotteries began. In my hometown, most folks seemed to know where to go if you wanted to place a bet on the “daily number;” such locations included stationary or tobacco stores, delicatessens, and even barber shops. Gamblers liked the fact that any money they won was paid in cash, with no paper trail, thus avoiding income taxes. Later in life, I found out that the gentleman who cut my hair for many years had a side business of selling bets for the “daily number.” The “numbers runners” would visit him daily to collect the money; his remuneration came from a modest “administrative fee.” He told me that this paid for his annual family vacation to Florida, and mentioned that this side business didn’t seem to bother his customers, which included both the city’s longtime mayor and police commissioner!
Still, I have to question whether it sets a good example for a state to be in the gambling business. After all, quite often it is people who can least afford to lose money that spend a disproportionate amount of their hard earned income on lotteries and games of chance.
One day I parked next to a woman who was driving a rather old, beat up car. Its muffler was belching out air polluting fumes, had many dings and dents, and had several cracked windows. I could only assume that she did not have the money to purchase a newer vehicle. She went into the convenience store to buy cigarettes and spent $20 on lotto games. I did some quick calculating to figure that if she spends $25/week on cigarettes and $20 on lotto, this totals about $2300/year. Imagine if she invested that $2300/year and averaged a 5% annual return. Over a forty-year career, she could accumulate over $278,000, which translates to a $1200/month annuity, which is roughly what the average American retiree receives from Social Security.
Making better lifestyle choices would solve both many of our nations and its families’ financial challenges. I’m no advocate of telling people how to live their lives; I simply question whether the state ought to be promoting vices that could be a detriment to its citizens’ futures. State sponsored lotteries and gambling is one such vice.
That there are occasional big lottery winners does not eliminate the losses to the overwhelming majority of people. Remember, in gambling, the house rigs the deck to win. So does the state. As a youth I could never imagine the state becoming the biggest bookie of them all. I find this troubling.
Also troubling is the impacted lives of many lottery winners. A December 18, 2013 article in Forbes Magazine shares many stories of both happy and unhappy endings to lottery winners; some made good choices and investments, including philanthropy, while many others were dead broke within a few years.
I’m not trying to kill anyone’s joy over placing the occasional bet. I’ve been to Las Vegas myself several times, but always plan and limit what I am willing to lose, writing it off as entertainment. If I win, so much the better. But counting on gambling to provide for a secure future is not a wise move. Seeing the state profit from promoting such lifestyles is not government at its best.