Wednesday, January 13, 2016

Why $1.5 billion is not a good deal

At about 11 o'clock tonight, someone will win $1.5 billion. Maybe. The Powerball drawing will take place, and it is likely someone — or several people — will win. There is a 1 in 292 million (or something like that) chance that I will win. I'm not counting on it. I expect to be sound asleep when the winning numbers are counted. 

But I do have a ticket (just one), not because I think I'll be lucky but because it seems worth it to risk $2 on a 292 million to one shot at $1.5 billion.

I spent several years railing against a state lottery in North Carolina during debate over the issue. I still think it's bad public policy and a terrible way, bordering on unethical, to raise money for the state. A decade into this "voluntary taxation" experiment, all of the arguments against the lottery offered by critics have come to pass. Lottery income is replacing tax dollars, not supplementing tax dollars, in the support of public schools. Since the inception of the lottery, tax appropriations for public schools have fallen on a per-pupil basis, and teacher salaries have stagnated. The poor are the biggest buyers of lottery tickets, either from desperation or from ignorance of just what a one in 292 million chance really is. As critics claimed during the lottery date, a lottery is a tax on the poor and ignorant. And that's no way to fund public education or any other state function.

Who is winning the lottery? The big companies that make lots of money creating and operating the lottery games. A few jackpot winners get a lot of easy money, but the life stories of most lottery winners are not appealing.

I still believe North Carolina's joining other states in operating a lottery is bad public policy. Nevertheless, if I happen to beat the 292 million to one odds and win $1.5 billion, I won't refuse the prize. I'd like to think I can do some good in the world with that kind of money. But I won't be proud of how I gained my wealth. It will have had nothing to do with my abilities, persistence, industriousness, talent or determination. It will have been sheer, unearned, undeserved luck.

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