Here are the biggest lottery myths out there according to the North American
Association of State and Provincial Lotteries! We’ll go through the myths
they say they debunked and we’ll tell you if they actually did it.
11 - Alternate Tax According to the NASPL,
it’s a myth that quote, “Lottery is a form of taxation”. They point out the fact that
ordinary citizens have no option but to pay their taxes. They also nicely point
out that people who don’t pay taxes can be locked up behind bars. All this is true.
They then point out that playing the lottery is entirely voluntary.
Buying a lottery ticket is an individual choice just like buying anything else.
The only consequence to not playing the lottery is missing some fun and possibly a prize.
They then bring up the argument that some people argue that the lottery is an implicit tax,
because it has quote, “higher administrative costs”. Opponents argue that the lottery is a less
efficient way of raising money. They counter and say that state lottery revenues go for education
and other state-supported programs, just like any other tax money does. And the last statement
they say is that “The lottery is simply a form of entertainment that happens to benefit your state”.
We do agree with them that technically the lottery
ISN’T a form of taxation. Other forms of this myth is that the lottery is a tax on the poor,
because they’re the people that play the most. True, playing the lottery IS a choice.
But poor people are still the biggest group that plays the lottery the most.
The NASPL also conveniently left out the research that shows when states have lotteries,
the allocation of taxpayer dollars that goes towards education actually
goes DOWN. That’s because politicians will reallocate those dollars elsewhere, since
the lottery money is going towards education! So it’s a wash at best,
and at worst, education suffers because the lottery has a down year!
Speaking of poor people, that brings us to:
10 - Prey on the Poor Next on their list is the myth that
“Lotteries prey on the poor and lottery purchases are made mostly by low-income
people”. They first start by stating that people from all walks of life and
all income levels play the lottery. We can’t disagree there. According to them,
US players bought more than $83 billion dollars in traditional lottery products in 2019.
So they use that figure to make the argument of quote, “Clearly,
the industry didn’t achieve sales of that magnitude by focusing on low-income players”.
They point out that they market their games to society as a whole,
just like any other business selling a product in a competitive marketplace.
They then give out stats for Americans in different income brackets playing the lottery.
They say that quote, “a recent Virginia study” found that 55% of people who play
the lottery at least once month have incomes of $55,000 thousand dollars or more. A third
of people who play at least once a month have incomes of $85,000 thousand dollars or more.
And in Michigan, 43% of players have incomes of $50,000 thousand or more and 75% have incomes of
$25,000 thousand or more. They also brought up a national study by Vision Critical. They found that
44% of lottery players have incomes of $55,000 or more and 77% have incomes of $25,000 or more.
We say that we’ll take their statistics at face value. But statistics can almost back
up any side of an argument with qualifiers put on them. For example, this bankrate national study
shows that people who make less than 30k play the lottery the most. So technically,
the lottery isn’t mostly made of the lowest income Americans. But,
they’re the biggest group. So it just depends on how you word the myth.
They also bring up the “zip code studies.” That’s when you take a certain zip code,
look at total lottery sales in that area,
and then assume that everyone in it has the same income and don’t buy lottery tickets elsewhere.
Of course, people don’t always buy their tickets in the neighborhoods where they
live. We’ll agree with them there. Plenty of people buy tickets on their way to work,
while shopping, or on vacation. They’re right that zip code studies fail to take this into account.
9 - No Benefits Here’s the next
myth they debunk. “You get nothing for your lottery purchase if you don’t win a prize,
and since there are relatively few winners, hardly anyone actually benefits from lottery”
So they bring up the fact that all residents benefit financially from
having a lottery in their state. They then list the many possibilities of how a state
can choose to spend its lottery revenue, such as towards education, economic development,
and the environment. It’s hard to disagree with this strange myth that they chose to bring up.
However, if we reword it as whether playing the lottery is good for individual players in the
long run all things considered, we’d say it’s a net negative for the vast majority of players.
Without lotteries, they point out that states would have to pay for these programs with taxes.
That’s definitely true. According to them, on average across the US, for every dollar spent
on traditional lottery tickets, roughly 25 cents goes to the programs that lotteries support.
Roughly 64 cents goes back to players in prizes.
They then put in a shameless reminder of playing the lottery with this statement of
why players play. They say quote, “Lotteries provide fun and exciting entertainment that
lets players dream about what they would do if they won. In our stressful world,
the ability to dream is well worth the price of a lottery ticket.” We wonder what about all
the lottery players who’ve won a jackpot and lost it all? Would they go through that again?
We do have to admit, it seems that with more information and resources available for winners,
the percentage of jackpot winners going broke will probably start trending down.
8 - Money Kept Here, they bring
up the myth of “The lottery makes and keeps all the money”. They claim that on average,
roughly 95% of funds generated from traditional lottery games goes directly back into the economy
through quote, “prizes, public beneficiaries and retailer commissions”. Basically,
they’re going over the same thing as what we just talked about in the last myth.
We’re not sure why they specifically brought up retail commissions, because why would the
average player care that the random place they bought the ticket from got some money as well?
Basically here they further break down where each dollar goes. So six cents of each dollar
typically goes to retailers. The rest, which is around 5 cents, goes towards running the lottery.
According to NASPL, U.S. lotteries generated more than $25 billion for beneficiaries in 2019.
We agree, it’s easy to see that not all the money goes to the lottery commission.
7 - Compulsive Gambling Here they break down the myth,
“Compulsive gambling has grown because of lotteries”. The NASPL claims that there’s
little evidence linking lotteries to gambling problems. They say that gambling help lines
throughout North America report very few callers who say that lotteries are the source of their
problem. While that may be true, that DOESN’T mean lotteries don’t contribute to the problem.
But researchers at Curtin University in Australia say otherwise. They published
a paper in the international journal, Addictive Behaviours.
They identified lottery scratch off tickets as being especially appealing to problem gamblers.
Even though the NASPL brought up a study from the University of Minnesota that shows that less than
1% of compulsive gamblers said the lottery was their preferred game, this doesn’t mean
that the number of people who have gambling problems hasn’t grown because of lotteries.
They also bring up a national survey on Gambling Behavior done by the University of Chicago.
They concluded that quote “it does not appear that the availability
of a lottery has an impact on (problem gambling) prevalence rates.” Basically,
the lottery association is trying to shift the blame to other forms of gambling.
They point out that there was a study that basically asked the opinion of
2,274 kids. It found that these kids most associated gambling problems with other forms of
gambling, such as card games, casino gambling,or sports betting. But what does how kids “feel”
about what activities they associate with gambling problems have to do with anything?
They then bring up studies that show that the rate of gambling problems is keeping stable. But that
still doesn’t disprove the statement, “Compulsive gambling has grown because of lotteries”.
6 - Internet Lottery Sales and Retailers
Here they bring up the myth, “If lottery sales are allowed on the internet, retailers will lose
considerable sales.” Clearly they’re advocating selling lottery tickets on the internet!
Lottery sales online is relatively new to the US,
and they point out that it’s a staple in other countries. Obviously,
being able to buy lottery games online is a growth opportunity for state lotteries. They’re
able to attract a wider audience and advertise to people who don’t normally play the lottery.
Of course, lottery retailers aren’t happy with this development, so it’s probably
why they specifically put this “myth” on their website. They’re saying that they can create even
more sales opportunities for retailers, such as online play only “gift” cards that
are available only at local retailers. Or rewarding online players with free ticket
coupons that have to be redeemed at retailers. If you ask us, it’s dumb to make things harder
for players to play the lottery online just to keep retailers happy. But that’s just us.
They go on to say that online games have been a proven success in other countries
and is a way to get more US customers to play by quote, “attracting new – and younger – players
to all lottery games”. Well okay then! Not much to disagree with here. They’re right,
if they do more online games, they can advertise to more people!
5 - Internet Lottery Sales and Kids And here they continue talking about
internet lottery sales and how it’ll affect kids. They say that it’s a myth that quote,
“If lottery sales are allowed on the internet, compulsive and underage gambling will rise.”
They then argue that online lottery sales are a MORE responsible platform. It’s because they’re
able to limit daily, weekly and monthly deposit limits that address how much a player can put in
their account for playing. Oookay, we’ll give them that they can track and limit how MUCH
someone can gamble. And yes, there’s no way they can track how much someone spends at a retailer.
But how does that address compulsive underage gambling? They do mention tough
age verification measures at registration to make sure kids aren’t playing. But
let’s be for real. Kids are smart and they’ll figure out the ways to get around verification
if they really want to. Will underage gambling rise with kids? Maybe. What do you think?
4 - Lottery Security Part 1
Here they address the myth that a lot of players have, which is quote,
“There is no assurance that lottery drawings are conducted fairly.” This one we actually
agree with. They’re trying to make lottery drawings as fair as possible and make sure
no rigging is done whatsoever. Because as soon as they lose trust of the players,
no one will play. They have 100% incentive to make sure players keep playing as much as possible.
They say that official lottery drawings are carefully watched and closely scrutinized.
And that’s something we agree with. All state lotteries are subject to internal and independent
audits to verify that the equipment and process are providing random results.
The NASPL go on and state that equipment used for drawings is regularly tested
and procedures are recorded on video in the presence of witnesses. In addition,
the machines are securely stored, often in a locked vault, and accessed only by a limited
number of authorized personnel. Not much to disagree with here.
3 - Lottery Winner Curse Here they tackle a big problem.
They claim that it’s a myth that quote, “Big lottery winners are worse off than if they hadn’t
won the lottery”! Here’s how they tackle this myth. Without ANY reference to any research,
The NASPL says that history shows that the vast majority of lottery winners make positive
long-term decisions with their winnings. So yeah, they haven’t exactly debunk this myth.
They then go on and give examples of how winners positively use their money, such as
investing for retirement, saving for their kids’ education, and donating to charities. They then
give a blanket statement about how lottery money isn’t any different than any other
large source of income that someone may get, such as an inheritance or the sale of a business.
We don’t even know where to begin here. We’ve covered extensively on
the channel about how a huge amount of money can affect people psychologically.
Yes, they’re right, lottery money is just like any other money. But the key factor is whether
someone is USED to that amount of money before. And it doesn’t take research to figure out most
people aren’t used to getting millions of dollars at a time. Now do most winners go
broke? The commonly thrown out figure of 70% of lottery winners going broke IS most likely a myth.
But their statement of quote, “the vast majority of lottery winners make positive
long-term decisions with their winnings” is something that can’t
be substantiated either. They then go on to say that quote, “perhaps it’s just human
nature that causes us to remember those [bad] examples rather than positive ones.”
If you’ve been following this channel for a long time, then you’ll know that there are plenty of
people who have had bad outcomes when it comes to lottery wins. Click here to find out more!
2 - Lottery Security Part 2 At number two, they tackle this interesting myth.
Apparently some people believe quote, “Because state governments benefit from lottery proceeds,
they can't be trusted to regulate their industry”. This myth is really easy to
debunk. If states want more money, they can just increase taxes. Of course, people would
eventually leave if taxes rise to a level they don’t agree with, but that’s besides the point.
Because state governments do want people to play the lottery, they need the trust of players,
and they again, have every incentive to make sure the industry is run ethically. The NASPL brings
up the good argument that we trust state politicians to make their own tax policy.
They also bring up the fact that lottery files are public record and open to scrutiny by the media
and by any citizens. Lottery board meetings and legislative hearings also are open to the public.
1 - Lottery Scams And for the final myth, the NASPL tackles
lottery scams! They make it known that it’s a complete myth for anyone having to pay money
to get a prize! If you’re a subscriber, we know that you already knew NOT to do this.
Click to watch one of these next videos!