Three winners from California, Tennessee and Florida will share the Powerball pot, which has risen to over $1.5 billion. Ironically enough, the drawing has spurred people to buy more tickets, which increases the size of the pot and decreases their chances of winning.
On the radio one morning, I heard the host list the top seven reasons why you don’t want to win the Powerball. Among the reasons listed were the inconvenience of being asked for money, the issue of potentially blowing it all with a risky investment or spur of the moment purchase.
Lottery tickets are primarily bought by people who believe that it’s a decent investment, a dollar for the chance to win thousands or even millions. For most individuals, it’s fairly harmless, but for some the compulsion to win can cause them to spend ridiculous amounts of money, sometimes beyond what they can reasonably afford.
I can’t say I see lottery tickets as anything more than a foolish gamble, as opposed to some casino games require that skill. It’d be different if lottery tickets had, say, a one in five chance of winning five dollars, or a one in 100 chance of winning twenty. Then, at least, over time, people would have the chance to recoup their losses. Instead, the lottery is set up in such a way that to play at all is to put money on the fact that most expect to lose. The odds are really bad at one in 292 million.
Poor people buy a disproportionate amount of lottery tickets, and the hype of such a large jackpot is even influencing people who usually don’t play the lottery to buy tickets last minute. The size of the prize is a lure that makes individuals feel like they have a greater chance at winning. I don’t play the lottery, but I do think that the recent excitement is helping me understand why people do play.
I don’t think the lottery is a bad thing in and of itself, but I do think it preys on people’s vulnerabilities. People are more likely to play the lottery when they’re feeling down, or feeling a hole in their wallet. The possibility of a windfall is enough to reverse their logic and make them think they could be the lucky winner that they could go from having money trouble to hopefully not having anything to worry about ever again.
Over 30 years, the annuity payout will come out to an average of $50 million a year, or nearly $137,000 a day. Needless to say, this is an amount of money that would be more difficult to manage than it would be to try to not lose. Sure, it would be possible to make enough poor judgement calls to waste over a billion dollars pre-tax. Still, I think the real problem would be finding a way to make use of the money, besides just sitting on it, letting it collect interest in investments or the bank.
The problem with the lottery is that it exemplifies the principle of easy come, easy go. Someone who isn’t accustomed to having a large amount of money or managing large sums of money is vulnerable to people who feel they’re just as deserving, since the lottery is purely a game of chance. People will look at the winner of the Powerball differently than they look at Bill Gates, even though both of them are filthy rich.
Additionally, the dramatic lifestyle change has actually ruined the lives of many lottery winners, who did not foresee the consequences of such a large amount of money being all but handed to them.
The lesson that can be learned from this Powerball is unlikely to be that people should play. Instead, people should realize that those who play the lottery very rarely win, and when they do win, they’re very rarely better off for it.