Comment by smt88 | Hacker News Reader

Comment by smt88 | Hacker News Reader

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I'm not surprised that there are anecdotes of people who play in a (mostly) harmless way. One question I have is whether there might be another way for your dad to have an equally fulfilling amount of fun without losing as much money. It would depend on the individual, obviously.

The problem with lotteries is that many of the players aren't like your dad. There are some serious ethical questions that arise when you think of lotteries are guaranteed to lose the vast majority of players a substantial amount of money:

1) If the state didn't run the lottery, who would? Would that money get funneled into public works if the state didn't run the lottery?

2) Is it ethical to market the lottery in order to create new players?

3) When the lottery is marketed (as it heavily is in many states), is it targeting vulnerable groups, like the poor?

4) Is playing the lottery an expression of hopelessness for some people? They know that their $5 is never going to multiply to $10 (the way it might for a wealthier person), so it's easier to risk that $5 for a chance to win $5 million.

> 4) Is playing the lottery an expression of hopelessness for some people? They know that their $5 is never going to multiply to $10 (the way it might for a wealthier person), so it's easier to risk that $5 for a chance to win $5 million.

I think this is key. Turning $5 into $10 is impossible. Turning $5MM into $10MM is inevitable. The Lottery is a band-aid to treat the symptom (hopelessness). Address the root cause, which is the lack of opportunity for economic mobility.

This is an excellent point.

I don't think this affects your overall point, but the lottery itself demonstrates that turning $5 million into $10 million isn't inevitable. Most big lottery winners end up broke again, if not worse, after not too much time. Obviously, the more typical sort of person with $5 million tends to do a better job with it.

If you have 7 or 8 years and drop it in a vanguard s&p index fund your odds are pretty good.

The $5 would be too small to even invest before getting eaten by fees.

Yes, but lottery winners don't tend to drop their winnings in the S&P 500, they typically blow it on toys and entertainment and gifts and end up with nothing.

I think you're on slightly different thread than we are.

We were saying that $5M is easy to turn into $10M, but $5 is impossible to turn into $10. We were referring to the fact that good investment vehicles are only available to people with large sums of money.

As a result, a poor person will be more inclined to blow the $5 on a lottery ticket because she has no investment options. It's still not a rational choice, but in her mind, she has nothing better to do with that $5 than take a chance at winning $10M. In her mind, that's how she gets to be a millionaire and no other way.

We weren't suggesting that a lottery winner will be a smart investor.

I was replying to the statement that "Turning $5MM into $10MM is inevitable." As the behavior of typical big lottery winners demonstrates, it's not inevitable. Possible, yes, probably even easy, just not inevitable. That's all.

Semantics. I believe it was a slight hyperbole but it reads as such.

I was careful to state in my initial comment that it didn't affect the overall point, and that rich people who get there through other means don't tend to fail that way. So there's no need to beat me up over missing the point, because I got it.

>Turning $5MM into $10MM is inevitable.

What do you mean?

Larger sums of money are easier to invest in ways that will provide meaningful returns, and doubling your money is inevitable over the long term. In comparison, that $5 will probably turn into a meal or other short-term benefit.

If you have only $5 in your pocket as this month's disposable income, there is no investment vehicle for turning that into $10. Besides putting it in a bank where it will lose value due to inflation, gambling may be the only non-zero investment opportunity available to you.

On the other hand, if you have $5MM in your pocket, there are tons of investment opportunities for you to choose from, from treasury bills to angel investing, limited only by your appetite for risk. You have an entire financial services industry that exists for the sole purpose of helping you turn that $5MM into $10MM.

The idea of getting something for nothing, or less than what it's value is, is pretty hard to take from people. Lotteries just break that down to most base form, and slap a guarantee of authenticity on the return (however unlikely your chances are, it's not an actual scam or a lie that someone DOES win big)

To answer your questions..

1) no one, the state would shut any business like it down if it weren't the state itself - and that's a big flag in itself, as you mention.

2) If it's ok to have it, I don't see why it can't be marketed. It's age-limited (I'd say harder to break the rules and play underage than buying cigarettes and booze could possibly be since you have to go to the state itself to collect any large winnings)

3) "Players have more fun" is the one I remember seeing. If we were seeing ads like "I got out of my trailer park because I won big" or some such nonsense, I'd have more of a problem with it.

4) I don't know about that. That's assuming a lot on someone else's behalf. What you're calling an expression of hopelessness could easily be considered an expression of hope, or fantasy by others.

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