Friday, October 17, 2014

Time to shut down Texas Lotto | Last Word

Last week a legislative committee took up the question of whether Texas should abolish the state lottery.

If you haven’t been paying attention, the suggestion sounds outrageous.

Doesn’t the Lottery bring in billions of dollars and isn’t it a major source of funding for our public schools?

The answer is yes and no.

Billions, yes, but the lottery’s contribution to Texas public schools amounted to about three days of school.

If the entire $4.4 billion taken in were spent on schools, that would go to 11 days.

Look for a report early next year.

Whatever the report says, my bet is that the legislature will not end the lottery.

But it should.

The reason it won’t is that the only powerful argument for ending a revenue source that none of the payers complains about is one that doesn’t tend to move the legislature.

That argument is that it is the right thing to do.

First of all, it is sleazy for the government of the people, by the people and for the people to raise large sums of money by lying to the people.

Yet that’s exactly what ad campaigns do that suggest that you can become an overnight multi-millionaire.

“You can’t win if you don’t play,” goes one very powerful line. You can’t argue with the logic.

But if you are a statistician, you know that something else is true.

The odds of any single ticket winning Texas Lotto, the most popular of the lottery games, is nearly 26 million to one.

Statistically speaking, that means your chances of winning are the same if you play as they are if you don’t.

The second reason to close the lottery is that, as Garrison Keillor once pointed out, it is a tax on those who flunked math.

According to a study paid for by the Lottery Commission, the median amount spent on Lotto Texas tickets by those with post-graduate degrees was $4 a month last year.

Among those without a high school diploma, it was $10 a month.

In reality the disparity is worse.

That’s because the mean amount spent among the poor is inevitably higher than the median.

If you don’t understand the difference between median and mean, you shouldn’t be playing the lottery.

The mean is the average.

The median is the amount spent by the person midway between the top and the bottom, say the 50th ranked person on a list of 100 people.

One reason I say the mean, or average, is likely to be much higher is that there is much more room above $10 a month than below it.

The other reason is that the lottery’s official study shows that the median monthly expenditure among Lotto Texas players last year was $5.

But the mean was $13.69.

That is among all players.

The report doesn’t show the average amount spent by education or income level.

Apparently that is not information they want us to have.

Years ago, that information was contained in the annual report.

One year it showed high school dropouts spending an average of $173 a month and those with a college degree $49.

The affluent and well educated buy lottery tickets for entertainment.

They know they are unlikely to win, but can enjoy fantasizing until the winning numbers are released on the evening news.

For the poor and uneducated who buy, it is not fantasy.

It’s an investment strategy.

It is, as far as they can tell, their only way out.

Last year there was a significant jump in Lotto Texas playing, ranging from 10 to 15 percent, among high school dropouts, persons making less than $20,000 and Hispanics.

The legislature should look at whether lottery ads were especially targeted at these groups.

We expect payday lenders to prey on desperate citizens, but not for our government to.

Shut down the lottery.

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