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Households Earning Less Than $13,000 A Year Spend 9% Of Their Income On Lottery Tickets*
*UPDATE: The statistic above, which has been cited repeatedly including by PBS, may be wrong. Or at least it does not appear to be in the academic study that PBS referred to. Our readers and others have said that the correct percentage is ~2%-3%, not 9%.
ORIGINAL: It has often been said that lotteries are a tax on the poor.
And that's a fair description.
Joe Weisenthal pointed out yesterday that poor people regularly buy lottery tickets, while rich people only buy them when the jackpots have gotten huge.
What's less commonly realized is just how much money poor people spend on lottery tickets.
According to a 2008 study, reported by PBS, households that earn less than $13,000 a year spend a staggering 9% of their income on lottery tickets. (via Scott Heiferman).
That's 9% of an income that is presumably extraordinarily hard to live on to begin with.
Rich, educated people tend to ridicule lottery players because the odds against winning are so astronomical.
As PBS points out, you are 17-times more likely to get hit by falling airplane parts than you are to win the lottery.
And you're 50-times more likely to get hit by lightning.
But poor people keep on buying lottery tickets.
Why?
Because they're stupid?
That's the popular explanation, at least among rich non-lottery players.
But the more accurate explanation is probably that having any chance at radically improving their circumstances is probably better than having no chance.
In any event, the fact that households that earn $13,000 or less spend 9% of their incomes on lottery tickets raises a few questions.
First, are those households receiving money from the government in the form of food stamps, tax breaks, or welfare?
If so, is it really fair to spend taxpayer money on lottery tickets? Is that what the folks who support assistance to poor households expect the money to be spent on?
Second, given that lotteries are primarily used to generate revenue for states, might it not be fairer to just collect the revenue directly, as taxes?
Or have lotteries discovered a magical way to tax people--one in which even anti-tax crusaders voluntarily choose to pay huge taxes in exchange for a minuscule chance of making a killing?
Should the United States government raise ALL its tax revenue that way?
Anyway, the finding that households earning $13,000 spend 9% of their precious dollars on lottery tickets is startling. And depressing. And it's worth thinking more about whether the government should really be sponsoring lotteries.
SEE ALSO: 14 Lottery Winners Who Blew It All
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