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Comment by david2ndaccount | Hacker News Reader

The argument for the state having a monopoly on lotteries is that if there wasn’t a legal lottery illegal lotteries would proliferate. Thus to protect people, the state should run it as it would then be guaranteed to be fair and free of the criminal element (mobsters, etc.). Ideally, the lotto would just take in enough to pay the winners and administrative expenses. However, most states have abused this monopoly and just see it as an alternative source of revenue, which turns it into a regressive tax.

State lotteries should be small, should not be advertised and should not be sources of revenue for the state.

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The commercials I see here for the DC/VA lottery are quite disgusting.

I'm "kind of" fine with the state running it. But they should not be advertising on TV.

Yep. They use dark patterns and FOMO to push people.

Washington State Lottery has a slogan, "It's good to play!"

It really should be, "Playing the lottery is a pretty terrible idea and we're going to, on average, take your money. If you still want to play, fine, but cheeseburgers really are better than lottery tickets. Wealthy people got wealthy by putting their money into index funds and savings accounts."

... or running lotteries

Touché!

Washington State Lottery, "It's good to take your money!"

> Wealthy people got wealthy by putting their money into index funds and savings accounts.

No they didn't. Not with the implied "as an alternative to lottery tickets".

You could probably find a handful of very well paid and very lottery addicted people constantly blowing up that income. For 99.99[more 9s]% of people, the cost of lottery tickets is not the difference between getting wealthy and not getting wealthy. Even if they buy a bunch every payday.

I know people who have.

Yeah, and I know someone who got rich by buying the lottery. Anecdotal evidence doesn't really prove anything, does it?

80% of American millionaires are self made.

https://www.amazon.com/Millionaire-Next-Door-Surprising-Amer...

Consider also that the US was populated by people who arrived with nothing. It wasn't wealthy people that came here from Europe.

This number is going down with every home inheritance and isn’t stable across generations. It’s largely a function of homes being bought for low values appreciating to over $1 million and not a function of labour markets.

It doesn't sound like you read the book. Before dismissing it, I suggest taking a look at it. It costs $1.38. Not really a big investment in something that could make you wealthy. It's well worth it even if it has only one good idea you can use in it.

Does your use of “self-made" have any concrete definition?

I looked on the related website and the very first blog entry is about how you can teach your children the skills they identify as leading to wealth.

And yet, it appears that the claim is that, in general, people don't get taught these skills, and some people discover them through sheer grit and determination. Which seems contradictory.

And that's putting aside the weird concept where someone who earns 10 million and spends 9 million on stuff, is ranked as the same as someone who lives a meagre life and dies with 1 million in the bank. I'm not sure that concept translates well into the commonly accepted definition of millionaire.

Self made as in did not inherit their wealth.

> people don't get taught these skills

The knowledge is not hard to come by. The book lays it out in simple terms. There's nothing magical about it.

> I'm not sure that concept translates well into the commonly accepted definition of millionaire.

The book is not about a tortured definition of a millionaire or absurd stories about how their wealth was obtained.

It's a quick read and the book is what, a couple bucks? Why not just read it, and then criticize it?

While this book is getting a little long in the tooth (the title needs to be inflation-adjusted now, I suppose), it's still a fascinating read. The authors considered "self-made" to mean that the subject did not receive monetary support from their ancestors as an adult in the form of trusts, inheritance, or other forms of "economic outpatient care" (their term).

Who have what?

Did they become wealthy, end of story? Saving up money to be wealthy, without the rest of the context, is reasonably common.

If they either needed to specifically curate their lottery habits to become wealthy, or if they failed to become wealthy because of their lottery habits, then I'm interested. Because that's the part that I'm betting is quite rare. And it's also the part that needs to be pretty common if the message is supposed to work as a lottery-relevant message.

Turned a modest income into becoming a millionaire by long term investing in a basket of stocks.

The vast majority of wealthy people got wealthy by winning the birth lottery.

Someone's job is to increase the numbers.

I think they should spend the lottery money to hire someone who's job is to decrease the numbers.

Came here to say exactly this. People will play numbers games organized by the mob, so it does make sense to give them an honest game and keep the money from crooks. But the state take should be small. And absolutely no advertising.

Mob, let alone legal casino operators, would never get away with such ridiculous margins. Even organized crime faces competition from unorganized crime, your neighbor's home poker game will probably have a pretty low rake.

When I was a kid sport betting was illegal in Italy, and almost everyone I knew played illegal sport bets.

But we also had legal national Lotto[0], and _illegal_ Lotto betting with about the same margins.

And when sport betting got legalized, the odds given where about the same as the illegal one, until the latter de facto disappeared.

So, I'm not sure the mob would not get away with Lottery margins.

[0] the traditional Italian lotto is a betting game: you bet that 1-5 numbers will come out of an extraction, but it's up to you to choose how risky a bet and how much you bet, e.g. getting one number pays 11:1, 3 numbers gives you a 4500:1 etc

We had Totocalcio too. Btw, I didn't know anybody betting on sport results but I remember the TV talking about that. Interesting bits at https://en.wikipedia.org/wiki/1980_Totonero

I'm still not convinced that some lottery winners aren't preselected. I get it, that it is supposed to be auditable and resistant to cheating but wouldn't be the first time a large gambling system has been found to have issues. It also seems like whenever there is some financial crisis happening that Powerball and Mega Millions always go up and it gets talked about in the news.

Why would the state do that? They are making a killing by playing "fair". Unless you are suggesting literal bribery, I don't see it.

For some people winning the lottery (even smaller prices) is literally the only "realistic" way of getting a moderate amount of "wealth"

When there is an economic crisis, more people are stuck in bad situation and are more susceptible to moderate gambling. News and lotto operators are selling are happy to keep selling this dream

> For some people winning the lottery (even smaller prices) is literally the only "realistic" way of getting a moderate amount of "wealth"

That itself is questionable. Let's say somebody of poor socioeconomic background wins $100,000 in the lottery. Would they suddenly make reasonable financial choices with that money and "make it"? It's possible. But it would require completely changing the mindset that made them play the lottery in the first place. You know, the "It's a gamble and it's risky, but I feel like it's all about God." mindset. Possible. But unlikely, if you ask me.

This is a poor argument in favor of lotteries. It would be more beneficial for people in those areas to have less incentive to burn their money on lottery tickets, and the money that does get burned go to better education and improving conditions for them to climb the social latter and provide more realistic ways for building wealth. Instead of hoping for God's intervention through lottery wins.

Of course it's a poor argument and your arguement points in the right direction (though I don't have enough data to confidently make a statement about peoples ability to manage their finances)

But people like to dream and everybody knows that someone wins the lottery.

But that's partially the point, people's dreams of escaping their situation is used to exploit them. Then the state is funneling the money out of the most poor and desperate, which is out right depravity, to benefit mostly everybody else except who they take from the most.

That's not a fair and equitable system, nor arguably the way states should be managing such lotteries, particularly the profits from them.

I accept that a state monopoly is better than making the mob richer and stronger. However given that it's mostly the poor that play lotteries, bingo, etc and all of them are rigged against the players, the state should find a way to give back most of those money to the players (there are expenses to keep it running.) If a private company is running it for the state, the margin should be small. This is maybe even something a politician could use in a campaign.

Huh? The whole point is to generate revenue. Always was. Shitting down numbers rackets was just a side benefit used to sell the lotteries.

The horse is totally out of the barn on gambling. We’ve decided that it’s all good. I was at an MLB game this weekend and they go through the betting lines for different games in the scoreboard before the game. It’s fully mainstream.

A good example of an illegal lottery would be the Bolita [0] popular in SW Florida. It was all tied up with organized crime. This led to violence when Italian organized crime attempted to wrest control from the Latinos who first implemented it.

[0] https://www.tampabay.com/life-culture/history/2021/09/28/bol...

In Michigan they sold it by saying all the lottery money would go to education. But other funding to education was cut by the same amount, so technically the lottery is funding education even though the revenue increase went somewhere else.

This is my biggest pet peeve with local tax increases. They always claim the money is going to whatever the public most cares about - education, etc. - but really it's just an overall budget increase, and the amount spent on education doesn't actually increase.

Is it really a tax if it's voluntary? That seems like a contradiction of terms.

And why not ban the lottery entirely if you're not going to use it as a revenue source? Keep it around just to entertain poor people? 99.999% of them will still lose money anyway if it's morality you're worried about. Does it really matter to the winners whether they take home $100mm or $70mm (and the gov the remaining $30mm)?

It doesn't matter for the losers, they're out their money either way.

It’s a tax on lack of training in basic statistics.

> Is it really a tax if it's voluntary?

It's exactly the same situation as taxing smoking and drinking. So - yes.

It is not a tax in the strict, technical sense, obviously. But in practise it functions much as one.

The comment you're responding to tells you why it shouldn't be banned: because then it will be held by criminals (by definition) instead. And those criminals tend to have ties to less nice forms of crime too. So it's sort of a damage containment strategy, but it could (in the eyes of GP) be executed better.

Is it really true though. Lotto ticks are sold in every small corner store, many gas station convenience stores, and most chain convenience stores, and many grocery stores. If they were illegal, most of those places would stop selling. What percentage of people that currently buy lotto tickets would seek out illegal places to get them? If it's 100% then sure, keep the legal lotto. If it's 5% though, what then?

> Is it really a tax if it's voluntary? That seems like a contradiction of terms.

Um, it's not voluntary. Buying the product is voluntary. But the state taking a cut once you do buy the product is not voluntary. Don't mix those two aspects.

It's voluntary to buy a pound of chicken feet. It's not voluntary to pay VAT on that purchase.

It's voluntary to go to work and earn a salary. It's not voluntary to pay income tax on that salary once you earn it.

> And why not ban the lottery entirely if you're not going to use it as a revenue source? Keep it around just to entertain poor people?

One reason is to keep a legal way to do this, since otherwise illegal ones have higher demand and pop up. It's more expensive (and arguably worse for society) if you make gambling entirely illegal and instead need to go hunt down illegal lotteries with more police resources.

> 99.999% of them will still lose money anyway if it's morality you're worried about. Does it really matter to the winners whether they take home $100mm or $70mm (and the gov the remaining $30mm)?

You clearly don't play the lottery (and I don't mean that negatively). Most wins are small. $400 here, $2000 there. That's how you keep people hooked. And in those orders of magnitude, it makes quite a difference in practice.

Is that even true, though? I mean, there are varying levels of lotteries across the states. Five states don't have them. Is there clear evidence of illegal lotteries proliferating in the states with fewer state-run lotteries?

The first step here should start with the belief that the lotteries should just be outlawed, and then actually demonstrate why that won't work.

In GA the lotto funds scholarships. It might be regressive in that the poorest kids may be unable to get the grades necessary to earn HOPE scholarship, but insofar as taking vice that’s going to exist anyway and making it serve a public good, it seems like a pretty fair deal. It might be backward to call it so, but my entire life my dad told me not to play the lotto, that it was an IQ tax.

I love this idea that the state is free of illegal elements. Maybe that sort of thinking is part of the problem.

State-run lotteries are ALWAYS about the transfer of wealth and property from the poor and marginalized to the wealthy and connected. This was true during colonial times, this was the manner by which the state of Georgia divvied up land stolen via Indian removal, culminating in 8 substantial (and all rigged) lotterying of land that can only be characterized as stolen under the threat of muskets and bayonets. It's not a coincidence that lotteries became increasingly unpopular. This was then deliberately conflated with private lotteries ran by blacks, immigrants, and the poor where the house odds were good but not anywhere close - to the tune of 1 in 900 compared to 1 in 14 million or so for your typical 6 out of 49 game, made a moral issue, then a tax issue (giving more reason to raid minority neighborhoods), until the 1970s when essentially states began seeing the system as a two-birds-one-stone scenario both in raising revenue and also booting out what was otherwise an illegible parallel society that it had little direct way to profit from or exercise control over.

The really interesting counter-example - or really, the most incompetent series of lotteries ever ran by a state - was the excise farming schemes the British colonial administrators ran in SE Asia, in particular Penang and Singapore and further afield in Malaya, between the 1840s and officially 1903. Excise farming is basically the lotterying of monopolies on the vice trade for fixed periods of time, which existed since the 1500s and periodically gets brought out (prominently under Cromwell, and a bit during the restoration), except because the decline of the East India Company and the lack of civil servants and administrators who had a working knowledge of Chinese, which had become the biggest financial players and essentially realized that the authorities were unable to make sense of the place-of-ancestral-origin system that had little to do with what the British were familiar with (like blood quantum) and inadvertently enabled the same native-place association or Landsmannschaft (we need an English word for this, btw) to simply dominate certain vice trades by the simplest subterfuge - by leveraging the comparatively fluid role personal names represented. Yes, it took more or less an actual case of "all Asians look alike" for a state lottery to fail. Carl Trocki's works are the authoritative research on this subject and time period for those interested in what probably represents one of the most mind-boggling peacetime self-owns by two successive governments that in mainstream academic discourse (outside Subaltern, Asian, and Diaspora/Migration studies, which are arguably niche and very much interdisciplinary), represents the archetype for hegemonic power relationships in practice. I suppose one can also chalk it up as a lottery win there, a rare one, but someone does usually actually win the lottery eventually.

By same argument government should sell drugs, payday loans, gambling rings

Supposedly they use the revenues to help the needy groups. That's their reasoning anyways.

In California, they give a certain amount to schools, but the state legislature uses lottery projections to justify slashing budgets to the public school system. Kind of thinking this is not how it was envisioned to work.

Of course. States use cash budgets. If I give you a dollar, the general fund doesn’t need to.

Ugh, you could literally pay a UBI from that and CO2 dividends, yes it will be small but it would be fair.

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