If inequality is bad, why does the government run Powerball?

All of our politicians seem to agree that economic inequality is bad. It seems plain that our government is run by politicians. Why then does the government run the Powerball lottery, with a maximum prize this week of $1.3 billion (as with other government-promulgated numbers, be sure to discount for fraud! The after-tax value of an immediate payout of $806 million would be under $500 million I think)?

By the time this lottery is run, one or more Americans will be crazy rich while most of the rest of us will be slightly poorer (from having purchased losing tickets).

Am I wrong or is this like driving around in a Volkswagen diesel car with a “save the planet” bumper sticker on the back?


12 thoughts on “If inequality is bad, why does the government run Powerball?

  1. I think it’s more like flying around between your mansions in a private jet–like, say, Al Gore. Politicians are rich enough to be much more extravagant in their hypocrisy than you give them credit for.

  2. The explanation that I heard in some documentary or other (citation needed) is that states decided that they couldn’t stop people from gambling on their local mafia-run numbers rackets and therefore decided that they should step in and run their own lotteries, in the process generating additional revenue for education (“it’s for the kids!”) and (theoretically) being more organized/less risky than Mob-run games.

    It is, of course, a tax on people who are bad at math, but I think it’s entirely reasonable to assume that if we didn’t have state lotteries anymore, we’d end up with numbers rackets again.

  3. For years, the State of Florida used its lottery proceeds to fund generous “Bright Futures” college scholarships for Floridian high school grads. Depending on one’s high school GPA and class ranking, a student could receive as much as a 100% tuition scholarship plus a generous stipend for living expenses. In recent years, nearly all 40,000 undergrads at the University of Florida were on one of these “Bright Futures” scholarships.

  4. If I buy the winning ticket in CT and then move to NV, wait 181 days before claiming my prize do I avoid CT income tax?

    If so, do I need to move before claiming or can I claim now, move to NV or some other no income tax state for more than half a year, and when I file in 2017 avoid state income tax?

  5. “It is, of course, a tax on people who are bad at math, but I think it’s entirely reasonable to assume that if we didn’t have state lotteries anymore, we’d end up with numbers rackets again.”

    My wife’s uncle ran a numbers game in Harlem for years, until the state-sponsored lotteries put him out of business. He (and others) offered slightly better odds than the lotteries.

    Having the government sponsor lotteries is the height of hypocrisy and bad economic policy, not to mention immoral.

  6. I’ve heard that education funding from the lottery/gambling is offset by decreasing funding from other sources… so what’s the point?

  7. You had to go there about the diesels. Is it not bad enough the buyers of those cars were duped by VW’s chicanery, but you have painted them fools for believing what all car buyers believe, the information on the window sticker. I won’t defend VW, what they did deserves punishment (and I own one of the affected cars sans smug bumper stickers, so for me it is more than academic),) but the cars as VW made them put out less particulate and CO2 than most gas-engined cars at the expense of more NOx, at least when there is no SCR installed. Of course, it would have been nice if VW played by the rules and installed a compliant system the way BMW, Mercedes and Chevrolet have.

    The Powerball has become weird even for a chance game that normally trades in unreality. The prize has become so huge that one sort of hopes for multiple winners, even though there more than likely will be only one.

  8. CHenry: “The prize has become so huge that one sort of hopes for multiple winners, even though there more than likely will be only one.”
    It’s a silly amount of money for one person to win. It would make much more sense to require to have multiple winners instead. Of course, people might not see a greater chance of winning a lot of money as better than a lower chance at winning a ridiculous amount.

  9. A spectre is haunting Europe, the spectre of standing on the escalator

    kottke.org by Jason Kottke

    The London Underground recently conducted an experiment on one of the escalators leading out of the busy Holborn station. Instead of letting people walk up the left side of the escalator, they asked them to stand on both sides.

    The theory, if counterintuitive, is also pretty compelling. Think about it. It’s all very well keeping one side of the escalator clear for people in a rush, but in stations with long, steep walkways, only a small proportion are likely to be willing to climb. In lots of places, with short escalators or minimal congestion, this doesn’t much matter. But a 2002 study of escalator capacity on the Underground found that on machines such as those at Holborn, with a vertical height of 24 metres, only 40% would even contemplate it. By encouraging their preference, TfL effectively halves the capacity of the escalator in question, and creates significantly more crowding below, slowing everyone down. When you allow for the typical demands for a halo of personal space that persist in even the most disinhibited of commuters — a phenomenon described by crowd control guru Dr John J Fruin as “the human ellipse”, which means that they are largely unwilling to stand with someone directly adjacent to them or on the first step in front or behind — the theoretical capacity of the escalator halves again. Surely it was worth trying to haul back a bit of that wasted space.

    Leaving aside “the human ellipse” for now,1 how did the theory work in the real life trial? The stand-only escalator moved more than 25% more people than usual:

    But the preliminary evidence is clear: however much some people were annoyed, Lau’s hunch was right. It worked. Through their own observations and the data they gathered, Harrison and her team found strong evidence to back their case. An escalator that carried 12,745 customers between 8.30 and 9.30am in a normal week, for example, carried 16,220 when it was designated standing only. That didn’t match Stoneman’s theoretical numbers: it exceeded them.

    But not everyone liked being asked to stand for the common good:

    “This is a charter for the lame and lazy!” said one. “I know how to use a bloody escalator!” said another. The pilot was “terrible”, “loopy,” “crap”, “ridiculous”, and a “very bad idea”; in a one-hour session, 18 people called it “stupid”. A customer who was asked to stand still replied by giving the member of staff in question the finger. One man, determined to stride to the top come what may, pushed a child to one side. “Can’t you let us walk if we want to?” asked another. “This isn’t Russia!”

    There’s a lesson in income inequality here somewhere…1

    What a phrase! Check out Fruin’s chapter on Designing for Pedestrians for more.↩

    Ok, explicitly: the people standing are poor, the people walking are rich, and speed is income. When the walkers redistribute some of their speed to the whole group, on average everyone gets to where they’re going faster. But the walkers are unwilling to give up walking because they believe their own individual speed will prevail. “This isn’t Russia!” indeed.↩

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