My problem with the CA Lottery & Powerball

imageSomeone I know commented that the CA state lottery is a tax on people that are bad at math.

Y’know, I used to say the same thing, but while the statement is witty, it’s also dismissive of a more ominous act of our government. The fact is, as one of the most fiscally irresponsible states in the Union, bleeding heart liberal California facetiously & quietly figured out a way to get it’s deficit funded by it’s poorest citizens – VOLUNTARILY. Quote:

“…the lowest fifth in terms of socioeconomic status (SES) had the “highest rate of lottery gambling (61%).”

Yes, it’s ignorance that drives this behavior… but the fact that we have one of the worst school systems in the US & the capitalization of this ignorance (the lottery) is state-sanctioned: Doesn’t that bother anyone? Here’s some research:

Now for those of you who don’t know the ‘return-on-investment’ of the CA MegaMillions lottery, i.e. spend vs. return based on odds, here’s some stats: The edge that CA lottery (roughly -59%) has on players is more than 40x worse than a Vegas craps table. (-.7%) In other words, if for every $1 you spend on the lottery, you will make a little less than 40 cents, while for every $1 you spend on Vegas craps, you’ll make 99.3 cents.

Now that was MegaMillions odds.  If we’re talking about the new Powerball odds. MegaMillions is roughly -59%. Powerball is about -69%: i.e. CA Powerball returns are  10% worse than MegaMillions.  That’s right:  If it wasn’t already bade enough, it just got WORSE.

Imagine millions of a family of 4 living under the poverty line, buying just a single $1 ticket every day at the highest poverty threshold income of $23,000.  This is the equivalent of spending ~1.5% of their income annually on lottery tickets and having only a ~30% return.   That means 1.0% of every daily Powerball player’s income is spent on the lottery.

I’d love to know what the demographic breakdown is of where the lottery gets its money from, per dollar.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: