Texas Officials Surprised: Rich People Don't Play the Lotto

Radley Balko | January 14, 2008

The state offered up a whopping $50 lottery scratcher, hoping to lure the affluent into pissing away paychecks for the privilege of peeling flaky foil from small pieces of paper. The game was an enormous success, bridging a $93 million revenue gap in the lottery commission's budget—a gab the state had previously bridged by dipping into public school funds. One problem...

As it turns out, the $50 game, called $130 Million Spectacular, has fared best in middle-income neighborhoods typically not considered affluent, according to six months of sales data analyzed by the Houston Chronicle.

The Chronicle looked at each of the state's ZIP codes with at least 1,000 adult residents, dividing them into groups based on their median household income in the 2000 census.

The analysis found that sales of the $50 Spectacular surged across middle-income ZIP codes, seeing strong per-capita sales in areas both with incomes of just more than $30,000 and in those with earnings upwards of $50,000 and $60,000.

Sales figures dropped off in both rich and poor areas, although the state's poorest ZIP codes — those with median incomes of $20,000 or less — saw stronger per-capita sales than the richest, with incomes of $90,000 or more.

Relevant posts about Texas SWAT teams busting up private poker games here. Drew Carey video on a Texas SWAT team busting up an American Legion charity poker game here.

Comments

|1.14.08 @ 2:20PM|#

No surprise...those with a lot of money do not have much incentive to play the lottery, but those who are desperate or are being squeezed by various living expenses do. At any rate, gambling is a terrible and socially destructive way to pay for govt.

|1.14.08 @ 2:24PM|#

The very idea of someone paying 50 bucks to play one of those lame scratch-off games has me in stitches. That is a whole new level of stupid. Why not just buy fifty 1-dollar games and at least stretch out your game-playing time?

R C Dean|1.14.08 @ 2:32PM|#

Rich people who want to gamble use the biggest floating crap game in the history of the world - Wall Street.

SxCx|1.14.08 @ 2:32PM|#

I caught some co-workers celebrating over winning $50 in the provincial lottery last week. They've been putting in $10 each every week for the past year or so. To my knowledge, they've never won anything before.

Again, they were celebrating.

|1.14.08 @ 2:33PM|#

"Rich people who want to gamble use the biggest floating crap game in the history of the world - Wall Street."


Thats just it, the more money you have the less of a gamble Wall Street is, and the more easily you can manipulate it.

|1.14.08 @ 2:35PM|#

This is exactly why I voted against any state run lottery. IMHO it is an admittedly voluntary tax on those who can afford it least. I have personally seen people spend a considerable amount of money playing at one time (usually right there at the convienence store) and not win a freaking thing.

It's sad actually that the state has no problem with someone spending all of the rent on stuff like this. The same state that wants people who happen to consume cannabis to be unemployed and not able to even make enough money to pay taxes.

"Dope will get you through times of no money better than money will get you through times of no dope."

Freewheelin' Franklin

Episiarch|1.14.08 @ 2:36PM|#

I find it hard to feel too bad for people who think that a good move is playing games that have billion-to-one odds.

|1.14.08 @ 2:40PM|#

The only officials who could be surprised are the ones who've never been to a 7-Eleven with clusters of street people hanging around the counter endlessly buying scratch-offs. Never seen any rich (or even "middle income") people in that line.

|1.14.08 @ 2:40PM|#

Screw those Ponzi schemes. I have never paid for a scratch-off, but I've gotten a few as gifts from time to time.

They're crappy gifts too. It like, "here, have a piece of paper that has a 70% chance of being useless!"

But this past X-Mas, I got a couple that won me $63 bucks, and they are still sitting in my car because I can't find a retailer who will reimburse me for them.

Some places have even said, "most people just get more tickets," at which point I grumble at the stupidity of humankind and walk away slowly and dejected...

Dan|1.14.08 @ 2:45PM|#

You folks at reason are a bunch of racists. You talk about income but really you mean blackness. Why are black people bad at math? Why don't you just ask that. I know you are just a front for the white nationalism movement.

I'm going back to LR.com where I don't have to read all this kochtopus approved nonsense.

Nash|1.14.08 @ 2:50PM|#

"The only officials who could be surprised are the ones who've never been to a 7-Eleven with clusters of street people hanging around the counter endlessly buying scratch-offs. Never seen any rich (or even "middle income") people in that line."

For that matter, and in reference to the article, I don't think rich zip codes have 7-11's.

|1.14.08 @ 2:50PM|#

Dan,

The people I see buying scratch-offs tend to be elderly, fixed-income folk of all colors.

Nice strawman though!

|1.14.08 @ 2:51PM|#

"I find it hard to feel too bad for people who think that a good move is playing games that have billion-to-one odds."

I would have a lot less problem with these "games" if the "games" were not run by and sanctioned as good by the state. It is bad enough that they can tax us, but now they are in the numbers game too.

I associate a game as an enjoyable activity which you can win every once in a while and it doesn't come at the expense of the milk money.

Bingo|1.14.08 @ 2:54PM|#

The only time I've known affluent people to play the lotto is when its at $300 million or above. Even then, its more for the novelty of participating than actually trying to win the money.

I'm also amazed at how picky people are about which ticket they get. It's always some dingy bastard trying to figure out if he wants a couple $5s or maybe a $10 and oh not the one in the front, the one behind it. Statistics should be a required high school course, sheesh.

|1.14.08 @ 2:58PM|#

*smacks self on forehead*

|1.14.08 @ 3:03PM|#

state run lottery = mob numbers racket

|1.14.08 @ 3:07PM|#

Don't be baggin on the rich. They're busy keepin the economy goin while I piss away the kids' insurance premiums on scratch tickets, ciggies and beer.

|1.14.08 @ 3:14PM|#

state run lottery = mob numbers racket

Not even close. The mob run numbers game generally paid $600 - $800 for a pick three. The state pays $500. Who's your buddy, who's your pal?

|1.14.08 @ 3:14PM|#

But I know it is money well spent after I sent $500.00 to the tee vee preacher as seed money. He said after sending it I could pray for a financial blessing and would most assuredly recieve it. I prayed to hit the Lotto . Praise God!

|1.14.08 @ 3:17PM|#

State lottery = stupidity tax

That's one tax I can definitely get behind. If only they used the revenue to lower all the other taxes, instead of finding new and imaginative ways to spend it...

|1.14.08 @ 3:18PM|#

Dan,

That's some stupid shit. Your poo has receieved a rating of zero. Please improve your poo.

|1.14.08 @ 3:22PM|#

Taktix,

I think that must have been a fake Dan.

Real Dan can't be so witless.

I think.

|1.14.08 @ 3:24PM|#

The funny thing is when they track down people who won the lottery and took a lump sum payment 10 years later, and find out they've blown it all already.

Unfortunately, the lifestyle of the typical lottery player doesn't offer the best training for how to manage a few million dollars effectively (though it doesn't help that the govt is going to take half of your winnings in taxes, either). Obviously the state has ulterior motives in wanting to spread the payments out over decades, but it's probably better for the typical winner as well.

|1.14.08 @ 3:37PM|#

To caveat what crimethink said, didn't everyone already know that the lottery is a tax on ignorance?

ed|1.14.08 @ 3:45PM|#

Rich people who want to gamble

Dollar cost averaging a mutual fund with an 40-year average return of 11% isn't much of a gamble if you have the time and patience. And you don't have to be rich to participate. Lottos are for suckers, but we all know that.

Chuck|1.14.08 @ 3:49PM|#

The line that caught my attention was this one:

...bridging a $93 million revenue gap in the lottery commission's budget-a gab the state had previously bridged by dipping into public school funds.

Does this mean the lottery was losing money? How in the hell can you lose money running a lottery?

Tym|1.14.08 @ 3:50PM|#

"Rich people who want to gamble use the biggest floating crap game in the history of the world - Wall Street."

The options market is more like a casino than the stock market; unlike the stock market but like gambling, it is a zero sum game.

They're crappy gifts too.

I once got one for a gift and won ten bucks, ... but unfortunately left them in my pants pocket before putting them in the washing machine, oh well...

Paul|1.14.08 @ 3:56PM|#

Rich People Don't Play the Lotto

Woohoo! I'm affluent!

R C Dean|1.14.08 @ 4:01PM|#

Dollar cost averaging a mutual fund with an 40-year average return of 11% isn't much of a gamble if you have the time and patience.

Well, sure, but if you're rich and feel the urge to let some money ride, you don't buy a an all-market fund. You get a thousand shares of some microcap.

Paul|1.14.08 @ 4:12PM|#

RC,

With all due respect, yes, playing the stock market is gambling, but it's an entirely different sort.

If Vegas changed their table rules to work the same way Wall Stret does, I'd be in Vegas right now. Let me be more clear:

I'll put a bet down on the table, if part way into the game I don't like what's going on, I'll take back some of the money I put down on the table. Depending on how bad things got and how fast will dictate how much of my original bet I can take back.

You could argue that poker kind of works this way, but it's stretching. I have never once lost 100% of a bet when "playing" Wall Street.

Now, stakes do get higher on Wall Street when you start messing with Options and Futures, but still, it's not exactly the same thing.

|1.14.08 @ 4:21PM|#

The lottery is a tax for people who are bad at math.

thoreau|1.14.08 @ 4:24PM|#

I'm with Chuck: How does a lotto lose money?

And what happened to the claim that lottos fund schools? Now the school funds are going to the lotto?

|1.14.08 @ 4:34PM|#

Does this mean the lottery was losing money? How in the hell can you lose money running a lottery?

The government can find a way.

|1.14.08 @ 4:51PM|#

Here in Colorado, the lottery was in the process of being sold to a private contractor. It was also beset by unethical employees taking liberties with the expense accounts.

I'm shocked, shocked and outraged, I tell you! (/snark)

Sorry, I have not heard of the outcome of these situations and I have no links.

SIV|1.14.08 @ 5:55PM|#

Dollar cost averaging a mutual fund with an 40-year average return of 11% isn't much of a gamble

Rule #1: Past performance is no guaranty of future results.

|1.14.08 @ 6:13PM|#

Think about it. The odds of winning on 1-2-3-4-5-6 are the same as on any other six numbers. That ought to tell the Lotto players something.

|1.14.08 @ 6:38PM|#

Easy solution: Just return the money directly to the communities that purchased the tickets. Don't spread it around equally to the communities that don't buy tickets.

The poorer areas more prone to buying scratch cards will benefit by getting more of the revenue generated.

Net result: better schools in poorer neighborhoods.

Make no mistake, the lottery targets poor neighborhoods. Then it takes the cash an puts it into wealthy neighborhoods on an equal basis.

|1.14.08 @ 7:29PM|#

crimethink,

You've never heard of these folks?

|1.14.08 @ 9:12PM|#

Sully,

I thought states usually spent more on schools in poorer areas, while the suburban schools were supported by local property taxes. Not that the problems in inner-city schools are the sort that can be solved by throwing money at them...

Bill Mossburg|1.15.08 @ 8:08PM|#

The lottery is just wrong and should be done away with!