Who Runs The Lottery
With the cancellation of 4th Avenue events, including Running of the Reindeer, we've teamed up with Alaska Communications and the Reindeer Farm in Palmer to give you the chance to win a Reindeer Farm experience for two and admission to the 2022 Running of the Reindeer! This raffle, benefiting Toys for Tots and Fur Rend. In The Lottery, The Lottery is run by two men named Summers and Graves. If Shirley Jackson chose those names for a reason, what might they represent or symbolize?
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Here’s a riddle: At the grocery store, what product is sold by the government, used by half of all Americans, and yields more than $50 billion in revenue a year? It’s not milk, eggs, or bread. And stamps don’t make that much money, or the post office wouldn’t be in such trouble.
No, it’s lottery tickets, and they’re arguably worse for you than the fattiest junk food in the store. But debates on state-run lotteries are rare, because craven state-level politicians of both parties depend on the revenue. And because of the way this industry works, what that really means is that the state depends not on the casual player, but on addicted gamblers. State-run lotteries—and scratch-off tickets and the like—are wrong because of two simple factors: who plays the lottery, and how they are encouraged to play.
Lotteries’ revenue is consistent with the Pareto principle, which in this context states that 80 percent of total profit often comes from roughly the top 20 percent of consumers. For most businesses, this is intuitive and unproblematic. A bookstore depends on avid readers, a stereo shop on audiophiles, and so on. But when it comes to vices—especially state-sponsored vices—we need to be more squeamish.
A widely-cited 1999 Duke study determined the demographics of this top 20 percent, and the results are disturbing. African Americans comprised 25.4 percent of the heaviest players, even though they make up only 12.2 percent of the country. High school dropouts were 20.3 percent, but 12.3 percent of the country. Those with household incomes under $10,000 are 5 percent of citizens, but 10 percent of the heaviest players. The practical impact? Lottery players who were high school dropouts spent $700 a year on the lottery on average. Those with yearly household incomes under $10,000 spent nearly $600. These are the players on which lotteries rely.
State governments encourage this level of gambling with marketing campaigns unlike that of any other government service. Residents of New York in the 1990s will still remember the slick, “Hey, You Never Know” ad campaigns. My own grocery store’s lottery kiosk is a shining blue, with the giant (and slightly desperate) marquee “Lots Of People Win.”
Governors and legislatures defend these lotteries with disingenuousness at best and shameful self-interest at worst. Many lotteries “earmark” the funds toward popular programs—education the most prominent example. But while studies have found that earmarked funds do increase education funding, it’s virtually never at the amount advertised. Lawmakers anticipate the revenue increase and divert funds from the earmarked program to others.
An argument familiar to those in states that have recently legalized lotteries is that “the state next door is taking our money.” The reasoning goes that, if an adjacent state has a lottery, that state will “take” the home state’s revenue. This is persuasive at first blush, but it’s really a race-to-the-bottom technique masquerading as pragmatism. In reality, the amount of funds lost to people who live near the border and play in other states is small enough that it could be raised in countless ways.
Who Runs The Lottery System
Indeed, possibly the saddest aspect of most state lotteries is that the revenue really is not vital. It’s simply preferred because it’s yet another way (with fees, surcharges, and other gimmicks) of raising money without “raising taxes.” In fact, the National Conference of State Legislatures found that lottery proceeds constituted only 0.95 percent of net state revenue in 2006—“less than the revenue from motor vehicle license taxes.”
Truthfully, for lawmakers whose goal is to extract as much money as possible, no alternative will be preferable to what’s in place. But alternatives do exist: return to an illegal lottery; legalize and tax lotteries; or split the difference by allowing lotteries that provide solely for charities or other efforts in the public good.
Criminalizing lotteries would return us to the status quo until the mid-1960s. In those days, people with gambling itches often played in underground “numbers games.” UCLA Professor Mark Kleiman has argued that these games caused much less harm than modern government lotteries do. Black markets can’t advertise on television or erect kiosks in grocery stores, and therefore would not take in anywhere near the sum state-run lotteries do. Many liberals, though, have become uncomfortable criminalizing activities whose only victim is one’s wallet (although this is the policy toward casinos in most states).
A second option, then, would be to legalize all lotteries and tax them as we do most other vices. Practically, this would probably have the least impact on consumers. Prices would probably drop, because the states’ monopolies allow them to charge prices with massive profit margins, which a private market would undercut. States could then tax these private lotteries to make up the revenue. Allowing a citizen to purchase a vice disincentivized through taxation is far preferable to the government actually selling that product.
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Finally, a third option would be to carve out exemptions for charities or non-profits. For instance, the Heart & Stroke Foundation of Ontario runs a $2 million lottery. An idea with a similar motivation has been advocated by Stephen Dubner of Freakonomics fame: the “no-lose” lottery. Implemented in Michigan, the idea is that you deposit money in a participating bank or credit union, which then uses the combined interest to pay out lottery-like prizes, even though the player didn’t actually spend anything. Why hasn’t this been implemented more? It’s illegal in most states, because it would be competition.
Lotteries are bitter policy pills, because while it’s unlikely they’ll be repealed absent a major scandal, it’s not an exaggeration to say that no political ideology should support them. Conservatives and libertarians are against government programs, and especially against raising more revenue. It’s hard to imagine a principled conservative thinking a state monopoly whose sole purpose is to generate money is a good idea. Progressives, on the other hand, are adamant that protection of the poor and minorities is a responsibility of government, and that revenue should be raised by progressive means. But lotteries are terribly regressive, and actually rely on money from disadvantaged groups. Even though collecting revenue is important, we should remember that money is a means, common welfare the end—not the reverse.
Who Runs The Lottery System
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The villagers of a small town gather together in the square on June 27, a beautiful day, for the town lottery. In other towns, the lottery takes longer, but there are only 300 people in this village, so the lottery takes only two hours. Village children, who have just finished school for the summer, run around collecting stones. They put the stones in their pockets and make a pile in the square. Men gather next, followed by the women. Parents call their children over, and families stand together.
Mr. Summers runs the lottery because he has a lot of time to do things for the village. He arrives in the square with the black box, followed by Mr. Graves, the postmaster. This black box isn’t the original box used for the lottery because the original was lost many years ago, even before the town elder, Old Man Warner, was born. Mr. Summers always suggests that they make a new box because the current one is shabby, but no one wants to fool around with tradition. Mr. Summers did, however, convince the villagers to replace the traditional wood chips with slips of paper.
Mr. Summers mixes up the slips of paper in the box. He and Mr. Graves made the papers the night before and then locked up the box at Mr. Summers’s coal company. Before the lottery can begin, they make a list of all the families and households in the village. Mr. Summers is sworn in. Some people remember that in the past there used to be a song and salute, but these have been lost.
Tessie Hutchinson joins the crowd, flustered because she had forgotten that today was the day of the lottery. She joins her husband and children at the front of the crowd, and people joke about her late arrival. Mr. Summers asks whether anyone is absent, and the crowd responds that Dunbar isn’t there. Mr. Summers asks who will draw for Dunbar, and Mrs. Dunbar says she will because she doesn’t have a son who’s old enough to do it for her. Mr. Summers asks whether the Watson boy will draw, and he answers that he will. Mr. Summers then asks to make sure that Old Man Warner is there too.
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Mr. Summers reminds everyone about the lottery’s rules: he’ll read names, and the family heads come up and draw a slip of paper. No one should look at the paper until everyone has drawn. He calls all the names, greeting each person as they come up to draw a paper. Mr. Adams tells Old Man Warner that people in the north village might stop the lottery, and Old Man Warner ridicules young people. He says that giving up the lottery could lead to a return to living in caves. Mrs. Adams says the lottery has already been given up in other villages, and Old Man Warner says that’s “nothing but trouble.”
History Of Lottery Winners
Mr. Summers finishes calling names, and everyone opens his or her papers. Word quickly gets around that Bill Hutchinson has “got it.” Tessie argues that it wasn’t fair because Bill didn’t have enough time to select a paper. Mr. Summers asks whether there are any other households in the Hutchinson family, and Bill says no, because his married daughter draws with her husband’s family. Mr. Summers asks how many kids Bill has, and he answers that he has three. Tessie protests again that the lottery wasn’t fair.
Mr. Graves dumps the papers out of the box onto the ground and then puts five papers in for the Hutchinsons. As Mr. Summers calls their names, each member of the family comes up and draws a paper. When they open their slips, they find that Tessie has drawn the paper with the black dot on it. Mr. Summers instructs everyone to hurry up.
The villagers grab stones and run toward Tessie, who stands in a clearing in the middle of the crowd. Tessie says it’s not fair and is hit in the head with a stone. Everyone begins throwing stones at her.