Buying A Ticket Out of The Powerball Economy
The record $1.5 billion jackpot has been won, and Powerball mania has died down for now, but Americans are still stuck with a Powerball economy powered by the “lottery mentality.”
A week ago, Americans were in the grip of Powerball mania. A record-making $1.5 billion grand prize coaxed even those of us who never buy lottery tickets to spend at least $2 for a chance — however small — of becoming an instant billionaire.
The media did its part to hype the $1.5 billion prize, and helped sell even more tickets. Fox News stood head and shoulders above the rest. Fox Business host Charles Payne pleaded on the air with a colleague to endorse playing Powerball. “Fox and Friends” guest, and seven-time lottery winner Richard Lustig urged viewers, “Buy as many tickets as you can afford.”And “Fox and Friends” guest John Shapiro assured viewers that playing would “make you happier,” even though you won’t win.
If you bought a ticket, you had a 0.00000034 percent chance of winning. The odds were about 1 in 292,201,338 that you’d take home the prize. You had better odds of getting attacked by a shark (1 in 11,500,000), dying in an airplane crash (1 in 354,319), being struck by lightning (1 in 25,350), getting a hole-in-one (1 in 23,376), or dating a supermodel (1 in 88,000).
So why do we do it? It’s not because we don’t know the odds, it’s because the odds are so infinitesimal that we can’t grasp them. So, they become meaningless.
It’s because of what’s really on sale: hopes and dreams. In the face of incomprehensible odds, logic and reason go out the window, as Rebecca Paul Hargrove, who created hugely successful lottery empires in Florida and Georgia, and is currently president and CEO of the Tennessee lottery. “If you made a logical investment choice, you’d play a different game,” Hargrove told writer Adam Piore in August 2013, “It’s not an investment. It’s entertainment. For a very small amount of money you might change your life. For $2 you can spend the day dreaming about what you would do with half a billion dollars—half a billion dollars!”
Hargrove was onto something powerful. All but the wealthiest of us have at some point dreamed about what it would be like to experience that kind of financial security — to suddenly have enough money to pay all of our bills, settle all of our debts, and have the freedom to do whatever we want without worrying about the cost.
Of course, we can dream all we want for free, but, with apologies to Blondie, in this case dreaming ain’t free. The possibility of that dream coming true costs $2, and then some. Americans spend about $70 billion on lottery tickets every year — an average of $285 for every adult in the country. Yet, half of us never even play the lottery, and most of us who do only do so occasionally; 70 percent of the tickets are bought up by 20 percent of the players.
Carnegie Mellon University economics professor George Lowenstein writes that buying a lottery ticket isn’t about buying even the tiniest chance of winning huge amounts of money. It’s about a buying a license to fantasize. “Such dreams ares especially attractive,” Lowenstein writes,” in these days of limited income mobility, when buying a ticket for many people is their only possible (if not particularly realistic) ticket to easy street.”
Lowenstein writes that buying lottery tickets is “fairly harmless,” as long as it gives you some pleasure, and you don’t buy too many tickets. But the economic malaise that Lowenstein downplays as “limited economic mobility” is precisely what makes us buy lottery tickets. A recent study in Colorado reported that people with a maximum annual household income of $15,000 were almost as likely to play the lottery as the population as a whole.
For millions of Americans stuck in low-wage jobs with no benefits, and few opportunities for upward mobility, an infinitesimal chance at changing their economic outlook is better than none. We have what Chrystia Freeland, writing at the New York Times in 2011 called the “lottery mentality.” We play the lottery, despite the odds, because we see powerful evidence that ordinary people just like us can and do win, and it’s the only way most of us are ever going to have chance at any kind of wealth.
Read the full article on OurFuture.org.