Thursday, September 23, 2010


I almost never “play” the lottery, although I admit that the prospect of a $50 million win, a few weeks back, was too much to resist. In a moment of weakness, I slapped down five bucks figuring that, what the heck, somebody has to win. And somebody did.

Stupid, really. Nobody has to win, unless every possible combination of numbers is played. And what if I had won? The fact is that I’m not sure what my wife and I would do with $50 million. A change of venue to a more interesting city would be a start, but I like my job and can’t see sudden wealth as grounds for quitting, so moving might not be practicable. I also find the typical material trappings of wealth to be of marginal interest. What point is there in owning a home with more rooms than you actually use? I don’t drive, so expensive cars would be pointless. Motor boats are polluting, and sailing takes too much time to learn. I dislike wearing jewelry. I already have a wardrobe of reasonable-looking casual clothes, indistinguishable from Armani at a distance of greater than six inches. I could buy more expensive wine, but my dilettantish taste buds can barely distinguish between any bottle over $15 anyway. I have no need for more household consumer electronics. I don’t even own a TV, because even the biggest of big-screens fails to provide quality programming. The only thing worse than five-hundred channels of "reality" TV is five-hundred channels of reality TV projected onto a space the size of your living-room wall. As for that hallmark of the leisure class’s daytime itineraries, golf, I agree with Mark Twain that it just spoils a nice walk. Oh, I’d travel more, but moderate travel isn’t beyond my financial means now. Maybe Oprah’s right: maybe wealth doesn’t make you happy.

The lottery serves us mainly as a useful reminder of the remorseless logic of a universe that operates according to constant physical principles that we are powerless to alter. It just goes on, inexorably, and that LottoMax number you play every week will come up, on average, once every 85,900,584 draws – or about once every 1,651,934 years. It could be this year; it could be in a million. It doesn’t matter if you play your mother’s birthday or your lucky numbers or pray for divine intervention. The machine that randomly selects the seven numbers doesn’t care.

Admittedly, that particular game gives you better odds than that, since it generates three numbers on every $5 ticket, increasing your odds to a can't-miss 28,633,528 to 1. Put it this way: write down the names of every person in Canada. Put them in a hat. Draw your name at random. That’s about the same odds.

Unfortunately, statistically, you’d also have to spend, on average, about $150 million to win the grand prize, which never exceeds $50 million and might have to be shared. It’s for this reason that billionaires, looking for a fast buck, don’t simply buy 28,633,528 unique tickets every week: winning would be a bad return on investment.

Most people don’t believe this, of course. They believe that there are other forces at work. Toss a coin ten times. It comes up heads the first nine times. When polled, most people will say that tails is most likely to come up on the tenth toss, because they believe that tails is “due”. Things have to even out, right? Well, no, they don’t, and for a simple reason: the coin doesn’t care. But this “gambler’s fallacy” is nonetheless a very commonplace belief. Our cognitive equipment evolved to seek patterns, and sometimes will find them even where they don’t exist. We aren’t by nature rational – we have to force ourselves to be.

I recall a math teacher, circa the 10th grade, who taught this lesson in a dramatic fashion. He bought three lottery tickets. On one, the numbers were selected at random. On the other, the numbers were the same as last week’s winning numbers. On a third, the numbers were 1, 2, 3, 4, 5, and 6. When asked, the class overwhelmingly agreed that the numbers selected at random were the most likely to win, and we were divided on which of the other two tickets were least likely to win, with a slightly greater number doubting that the same numbers could come up twice in a row. Even after the teacher explained that the draw is completely random, that the computer selecting the numbers doesn’t care what numbers you choose, and that therefore any combination of numbers is as likely to appear as any other, most of us retained grave doubts. Surely 1, 2, 3, 4, 5, and 6 can’t happen.

Polls show that most regular lottery players don’t really understand how long the odds are. They also tend to believe that their wins and losses even out, think that their chances of winning on any given draw increases over time (just like they believe that “tails” is more likely to come up after a run of “heads”), and most of all are convinced that the numbers they choose is consequential in the outcome. A disturbing poll in the United States even found that a significant percentage of people believe that lottery winnings will be a significant factor in their retirement savings. I have no doubt that many Canadians think the same way.

It’s at this point that I wish to raise the issue the government’s involvement in all of this.
Back in the day, gambling and booze were the province of organized crime. For some time now they have been the province of the province – the province of Ontario, that is, and indeed every other province in Canada that runs lotteries, casinos, and liquor stores. I’ll leave aside the fact that we pay taxes so that the government of Ontario can sell alcohol to us at inflated prices for another occasion. For now, let’s consider the Ontario Lottery Gaming Association, whose website, overflowing with photographs of smiling, happy people, positively gushes that lotteries and gambling generated $3.8 billion in economic activity last year. But they say this as if that activity wouldn’t exist if the lottery didn’t, as if the $5 that I spent would disappear into a black hole if I hadn’t taken a 28 million to 1 spin of the roulette wheel that week.

Moreover, a closer look reveals that $1.8 of that $3.8 billion (what the website calls “support for communities”) is spent just keeping the lotteries and casinos running, while $1.9 billion of the remainder goes to “hospitals, health related programs, and other provincial priorities”, meaning that it goes into provincial coffers generally to be disbursed as the government sees fit.

Our casinos are jammed to the rafters with gambling addicts shattering their own lives, and the same government that will eventually pay for social services (or jail cells) to pick up the pieces is content in the short-term to help them in the process. As for lotteries, Ontarians spend an average of $550 per year on tickets, with the lowest income bracket spending an incredible and truly depressing 4% of their income on them. The same government that is telling Canadians to save more for retirement spends our money to encourage us to play games of chance from which we will almost always emerge as losers.

State-run lotteries are a form of voluntary communism. Put your money into a pot, and the government will redistribute it for you. It’s a legal, socially sanctioned, massively promoted weekly pyramid scheme in which millions must lose in order that, on occasion, some random individual will win. Here’s an idea. Don’t play. Don’t gamble. Want to support our hospitals? Give directly to them, and get a tax receipt. Want to generate economic activity? Spend some of your lottery and gambling money at local shops and stores on Canadian-made goods. Want to support your community? Save more for retirement, so that the community doesn’t have to support you when you retire. But don’t play. Don’t gamble.You won’t win anyway.

1 comment:

Graham Broad said...

This early update brought to you by lucky chance.