Yes, I am aware that there are 1,000,000,000 reasons to play Mega Millions this weekend (And an additional 470,000,000 reasons to play Powerball). However, I am giving you 3 reasons NOT to play MegaMillions or Powerball this weekend or ever!!
1 – A Sociological Reason
The problem with the lottery is that it makes poor people feel poor. Studies have shown those making less than $13,000 in annual income spend anywhere from 5%-9% of their income on lottery tickets. Let that statistic sink in for a minute.
Every ticket you purchase drives up the jackpot which further entices those with the least money into playing the lottery.
Which is why many people refer to the lottery as a Regressive Tax on the poor. What the government isn’t able to take from the low income earners in taxes, they take in state-sanctioned gambling. Other call it a positive feedback loop, where the poor play the lottery which keeps them poor which keeps them playing the lottery.
Meanwhile the state governments* (and federal governments by taxing the winnings) are making literally tens of billions of dollars (states took in $70B in 2014) off of the lowest earning. Plain and simple, the lottery is a state-legalized gambling system that exploits the most vulnerable in our society.
2 – A Mathematical Reason
[Warning: numbers ahead...]
The lottery is like the house in Vegas, they will always come out ahead. So, let's look at some of the mathematical gymnastics that the lottery system plays on us. A few of the tricks they play:
• First of all, it’s not $1B you’re winning. You’re winning a $1B annuity paid out over 30 years.
• Based on current interest rates, the actual cash out is $565.6M.
• For instance, in NJ you pay 10.5% income tax (in addition to all of the money NJ made on ticket purchases) so $59M goes to NJ in taxes.
• Then about 35% goes to the federal government in income tax. (After you deduct your state tax payment) Your federal tax payment would be $177M.
• Out of the $565.6M, you pay $237M in taxes and your take home is $329M.
Your odds of winning that $329M are 1 in 302,575,350. That still seems like the odds are in your favor until you remember 2 things. First, each ticket costs $2 to purchase. And second, there are other people who are also buying tickets (5 of the 7 highest jackpots were split winners). So you might need to share your winnings and “only” take home $164M.
I get it. $164M is not a small number, but it certainly is a far cry from $1B that gets published.
No matter how you slice it, the expected value for playing the lottery is a negative sum game. And yet, according to one study, 21% of American polled believe the lottery to be the best strategy to accumulating wealth (The number increases to 38% when you lower the income level below $25,000).
It is unconscionable to see how glib Americans are about the lottery system, which serves as a Regressive Tax that continues to exploit the lower income. All the while, governments are double dipping in proceeds and taxes.
3 – A Spiritual Reason
Perhaps most instructive to me as to why I wouldn’t want to win $1B is because I wouldn’t be better off. Oh sure, I’d be better off financially, but there’s no question in my mind that I would be worse in perhaps every other area of my life. The plain truth is that I am not ready to be $329M richer.
The apostle Paul states in I Timothy 6:6-10 states a warning that should be enlightening to us all.
“But godliness with contentment is great gain, for we brought nothing into the world, and we cannot take anything out of the world. But if we have food and clothing, with these we will be content. But those who desire to be rich fall into temptation, into a snare, into many senseless and harmful desires that plunge people into ruin and destruction. For the love of money is a root of all kinds of evils. It is through this craving that some have wandered away from the faith and pierced themselves with many pangs.”
God doesn’t want you to be happy because you won $1B he wants you to be happy because you’re content with what he’s given to you. So, don’t be beset by greed, don’t feed the system and don’t further exploit the poor.
My son once opened his fortune cookie during dinner and I wish it could become the mantra of all thinking of playing the lottery.
"To be upset with what you do not have is to waste what you do have."
Amen, fortune cookie man, amen.