10 Reasons Not to Play the Lottery
The lure of the lottery is powerful. Just pony up a few bucks for a ticket while you're buying that coffee at the corner store and a few days later, all your dreams could come true. This line of thinking compels Americans to spend more money on lottery tickets than on books, movies, video games, sporting events, and music combined. In total, we drop more than $70 billion a year on the dream that comes with that little slip of paper inked with numbers. For virtually everyone who plays, however, that dream will never come true, and for the tiny minority that beat the odds, the dream often turns out to be a nightmare.
If you won $25,441 playing the lottery, you'd be pretty happy, right? Well, if you took the $300 that the average American adult spends on lottery tickets each year and invested it instead, you'd have exactly that amount after 30 years of $300 contributions, presuming a 6 percent return. By relying on compound interest instead of luck, you can generate a hefty windfall instead of praying for one.
The feel-good story with the lottery is that even if (when) you lose, the kids win every time you buy a ticket. The proceeds, after all, benefit public education. That's mostly a fantasy. First of all, the lion's share of the profits go to funding payouts, and another huge chunk is dumped into advertising. Generally, less than 1 dollar in 3 actually goes to education. Even though that's still billions of dollars for schools, the numbers are deceiving. Legislatures anticipate the lottery profits and simply substitute that money for traditional funding instead of supplementing it as the system was designed to do.
According to research by the Journal on Gambling Studies, the vast majority of tickets are sold to low-income Americans in poor neighborhoods. Poor people spend much more on lottery tickets than the general population, even though they can least afford to throw their money away. Why? Because that's where lottery-related advertising is most heavily concentrated, and that's where the dream is sold most aggressively.
A hugely disproportionate number of lottery winners receive state assistance. That means they're buying lottery tickets with taxpayer-funded money that was supposed to help with necessities. The state does not forbid this activity, in fact, it encourages it by advertising so heavily in places where residents tend to receive public assistance. But in a final act of retribution against the poor, many states, such as New York, confiscate prizes from anyone who receives assistance in the rare cases that they do win.
For the state, the best tax is the one they don't have to coerce out of the person paying it. Since players lose an average of $0.47 for every dollar they spend on lotteries, the system serves as an implicit tax of about 38 percent. In fact, many states earn more from lotteries than they do from corporate tax.
State lotteries enjoy the luxury of being exempt from federal "truth in advertising laws." That means advertisers can imply that with nothing more than a ticket, a dream, and some good vibes, winning is a real possibility. They're also allowed to downplay the odds and risks.
Time is just one of many publications to report on the so-called lottery curse. The sudden arrival of a massive cash windfall causes enormous upheaval in the life of the average person. Lottery players are likely thinking about the cars, boats, travel, and freedom that a lucky ticket would bring. They're probably not thinking about the fact that should they actually win, virtually everyone they've ever known will see them as a wallet packaged in extraneous flesh for the rest of their lives. Jealousy, greed, and resentment are common side effects of winning lottery tickets, and they can lead to isolation, paranoia, divorce, and depression, and can even make the winner a target for violence while increasing the chances of suicide.
If you happen to win a big prize, and you live in a state that requires public disclosure (or even if you don't but you're otherwise revealed as a winner), plan for a whole bunch of unwanted attention. You'll suddenly be one of the world's biggest targets for scam artists, fraudsters, blackmailers, and people who file frivolous lawsuits for a living.
All big lottery winners have one thing in common: the likelihood that they'll declare bankruptcy within three to five years skyrockets the second they cash in that ticket. Big lottery winners are incredibly likely to blow it all, go broke, and end up worse off than they were before they won. One of the biggest reasons is the sense of entitlement that friends and family tend to assume. Those hangers-on also tend to see the prize as bottomless, bleeding the winner of money and causing emotional distress along the way.
The odds of winning the Powerball grand prize are about 292.2 million to 1. CNBC provides some context for that impossible-to-grasp number. It's almost certain that you won't die from a shark attack, and the odds of that happening are a much more reasonable 1 in 3.7 million. The odds of dying in an asteroid strike are 1 in 1.9 million, which compared to the lottery seems like a virtual guarantee. If any situation had 1 in 292.2 million odds of success, the situation would be considered a lost cause.
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