When the 43-state Powerball lottery jackpot hit a record at $600 million Friday, many Americans who would otherwise not gamble rushed out to buy the $2 tickets. “Just on the off chance,” many probably said.
Last year, the multistate Mega Millions lottery also hit a record at $656 million. It, too, lured nongamblers to buy its $1 tickets. “What’s the harm?” many asked.
These record lotteries aren’t a fluke. States with lotteries have become so addicted to this revenue that they purposely look for new ways to create a gambling addiction among more residents. The eye-popping jackpots, made even larger as more states pool the winnings into larger sums, somehow bedazzle people to dream of instant wealth on a Donald Trump scale.
Meanwhile, many of these gamblers ignore the very long odds – about 1 in 175 million. And some get hooked – for years, draining personal savings and upsetting relationships.
The ultra-lotteries aren’t the only example of a worsening addiction among states to this “free” revenue. At least 10 states are weighing laws to allow online gambling, an easy, fast-paced, and private form of gambling that a 1999 federal study referred to as “crack cocaine” for enabling new addicts. Oddly, the gambling industry refers to online gambling as a “killer app.”
Last month, the United States saw the opening of the first legal website for betting on a game of chance (poker). Naturally, it was in Nevada and was available only to adults within the state. New Jersey may follow later this year with its own intrastate Internet gambling. Perhaps as many as 17 states could have Internet gambling by 2017, according to one analysis.
The impetus is a 2011 Obama Justice Department ruling that a federal law against Internet gambling doesn’t apply within each state. In addition, the gambling lobby is pushing states to get ready for Congress possibly allowing online gambling. Some states want to become a base for what they hope will be a nationwide boom in gambling via smart phones and other personal devices.
A study by Morgan Stanley Research predicts that online gambling revenues in the US will be $9.3 billion by 2020, or about the current revenues in Atlantic City and Las Vegas casinos. “More and more states are likely to legalize online gambling in the coming years, particularly once Nevada and New Jersey are successful in raising [gambling] taxes,” the study stated.
The industry claims it has the technology to ensure online gambling will stay within each state. Children will also somehow be barred from participating. Such digital hubris has yet to be tested by the best of hackers.
In addition, the Justice ruling may allow states to connect up and share online gambling, much like the mega-lotteries, effectively creating a national system without technically being “interstate.”
You can see where this addiction of states is going. Those who deal with problem or addictive gamblers – who make up 4 to 6 percent of gamblers – are rightly worried. They cite studies showing the social costs from gambling addiction outweigh the revenue for states. They also point out that most states now have “instant wins” for lottery consumers. Last year, more than half of the estimated $68 billion in lottery revenues came from these instant tickets.
Driving more Americans to gamble is a losing game. Gambling perpetuates the notion of luck as a source of happiness, which isn’t exactly what is needed for an economy in need of people focused on hard work, education, and ingenuity. Gambling isn’t a productive enterprise.
Before the news media play up the next record-setting mega-lottery like Powerball, they may want to add these kinds of caveats in their reporting. It could deter people from rushing to the corner store to buy a lottery ticket.
[Editor's note: An earlier version of this editorial gave the wrong year for the Justice Department ruling. The correct year is 2011.]