At least in Canada, that is. According to this CBC News report, clerks who sell lottery tickets are either really, really, really lucky or they steal winning tickets from their elderly customers. Who had the very clever thought of measuring the winning rate of lottery clerks? That would be Jeffrey Rosenthal, a statistician at the University of Toronto. I’ve read about Rosenthal a few times now, and am always impressed and intrigued by what he’s working on. This lottery story bears some obvious relation to the real-estate story we tell in Freakonomics. Maybe Rosenthal will turn out to be the Levitt of Canada.
(Thanks to Jeff Lewis for the tip.)
and 
. You can also watch it on 
I am convinced that Lotteries are simply taxes collected from poor people. It’s unfortunate that people don’t recognize this. It’s also interesting that gambling is treated with some contempt by government, unless of course they are running it!
I am convinced that Lotteries are simply taxes collected from poor people. It’s unfortunate that people don’t recognize this. It’s also interesting that gambling is treated with some contempt by government, unless of course they are running it!
Yes, but the normal model of government is to favor otherwise illegal or immoral activities when they bring in enough revenue for the local government. How you make the tax palatable to those willing to pay it is secondary after all.
So, internet gambling is bad because the revenue is not going to the local government. Lotteries and the like are “OK” because they do. Similarly with drugs. Alcohol brings in lots of local revenue, so is OK. Other drugs are not taxed and so are not OK (besides possible other issues). Likewise, prescription drugs and cigs imported by users are bad (no taxes), locally sold ones are good (lots of taxes). The fact that many “sin taxes” are more heavily paid by the poor is also the nature of most consumption taxes. You cannot scale up consumption, so the rich do not pay more (or much more).
Yes, but the normal model of government is to favor otherwise illegal or immoral activities when they bring in enough revenue for the local government. How you make the tax palatable to those willing to pay it is secondary after all.
So, internet gambling is bad because the revenue is not going to the local government. Lotteries and the like are “OK” because they do. Similarly with drugs. Alcohol brings in lots of local revenue, so is OK. Other drugs are not taxed and so are not OK (besides possible other issues). Likewise, prescription drugs and cigs imported by users are bad (no taxes), locally sold ones are good (lots of taxes). The fact that many “sin taxes” are more heavily paid by the poor is also the nature of most consumption taxes. You cannot scale up consumption, so the rich do not pay more (or much more).
Rosenthal reminds me very much of “Freakonomics”.
His book “Struck by lightning” is all about probabilities and is written at a very understandable level.
I finally understood why if there are only 23 people in a room, the odds are 50% that two have the same birthday. If 50 people, the odds are close to 95% or so.
Very much worth getting from your local library.
Rosenthal reminds me very much of “Freakonomics”.
His book “Struck by lightning” is all about probabilities and is written at a very understandable level.
I finally understood why if there are only 23 people in a room, the odds are 50% that two have the same birthday. If 50 people, the odds are close to 95% or so.
Very much worth getting from your local library.
I have heard lotteries described as taxes on the poor, as noted above, and also as a ‘tax on stupidity’. Both descriptions contain some truth.
But what are the attractions of playing the lottery vs other forms of gambling, especially for those who are poor, or not highly educated, or otherwise underprivileged?
Well, it’s convenient, unlike say, playing the slot machines. In that case you usually have to go to a casino. You can purchases a lottery ticket virtually anywhere that you purchase other everyday items.
Secondly, it’s pure luck. That means that in an honestly-run lottery, every ticket has an equal chance. That is not the case in other forms of gambling, where smarter, more experienced, or more knowlegdable players win more often (horse racing, poker, football pools, stock market, etc.).
Next, and related to that, playing the lottery does not require expertise or critical thinking. This makes a lottery an attractive gambling option for those who do not want to spend any time studying or researching. I don’t know of any other form of gambling where players frequently let others make their choices or pick their numbers (random tickets from a machine). Your choices do not affect the outcome or your chances of winning.
Also, unlike most casino gambling, with the lottery there is no real chance that you can ‘let your winnings ride’, other than for small amounts. Few people who win say $1,000 will turn right around and buy $1,000 worth of lottery tickets (partly because large payments take some time to collect). But someone who wins $1,000 at roulette or blackjack might very well decide to play the hot streak and go home with nothing. I would guess that lottery winnings have a better chance of being spent on non-gambling activities than would winnings from other forms of gambling.
Lastly, although the odds against winning the big jackpot are astronomical, there is still a chance. That hope remains alive every day for those who play. I suspect that even such a slim hope is very important to those with otherwise limited opportunities to improve their life. I suspect that that hope has more value to them than any extra money they might get from saving or investing the money they spend on lottery tickets.
I have heard lotteries described as taxes on the poor, as noted above, and also as a ‘tax on stupidity’. Both descriptions contain some truth.
But what are the attractions of playing the lottery vs other forms of gambling, especially for those who are poor, or not highly educated, or otherwise underprivileged?
Well, it’s convenient, unlike say, playing the slot machines. In that case you usually have to go to a casino. You can purchases a lottery ticket virtually anywhere that you purchase other everyday items.
Secondly, it’s pure luck. That means that in an honestly-run lottery, every ticket has an equal chance. That is not the case in other forms of gambling, where smarter, more experienced, or more knowlegdable players win more often (horse racing, poker, football pools, stock market, etc.).
Next, and related to that, playing the lottery does not require expertise or critical thinking. This makes a lottery an attractive gambling option for those who do not want to spend any time studying or researching. I don’t know of any other form of gambling where players frequently let others make their choices or pick their numbers (random tickets from a machine). Your choices do not affect the outcome or your chances of winning.
Also, unlike most casino gambling, with the lottery there is no real chance that you can ‘let your winnings ride’, other than for small amounts. Few people who win say $1,000 will turn right around and buy $1,000 worth of lottery tickets (partly because large payments take some time to collect). But someone who wins $1,000 at roulette or blackjack might very well decide to play the hot streak and go home with nothing. I would guess that lottery winnings have a better chance of being spent on non-gambling activities than would winnings from other forms of gambling.
Lastly, although the odds against winning the big jackpot are astronomical, there is still a chance. That hope remains alive every day for those who play. I suspect that even such a slim hope is very important to those with otherwise limited opportunities to improve their life. I suspect that that hope has more value to them than any extra money they might get from saving or investing the money they spend on lottery tickets.