The Powerball’s Long Con

by 
from Pacific Standard

Back in July, the Multi-State Lottery Association made a significant tweak to the Powerball lottery: They made it more difficult to win.

For the 36 states participating in the popular game, the odds of taking home the jackpot prize increased by about one-in-120 million—from one-in-175,223,510 to one-in-292,201,338—while the odds of taking home a $4 payout improved from one-in-111 to one-in-92. The rule changes were intended to “increase the odds of winning any prize, while making it more difficult to win the jackpot prize,” according to the New York State Gaming Commission. But as USA Today reported in July, there appears to be a different incentive afoot: Powerball sales have tumbled since the jackpot hit a record $590.5 million in 2013, declining nationally by 19 percent in 2014 alone. (Mega-Millions sales declined as well, according to New York gaming officials.) The real goal of the changes, which went into effect in October, is to raise jackpots, generate more excitement, and sell more tickets.

Six months later, the efforts of the Multi-State Lottery Association to breathe new life into a stagnant business have paid off handsomely. Saturday’s record Powerball of $950 million is expected to climb to an eye-popping $1.5 billion, more than double the previous record set two years ago. That pot has attracted major interest; according to the Associated Press, 75 percent of the possible five-number combinations were purchased ahead of the most recent drawing, which translates into sales of $277 million on Friday and more than $400 million on Saturday—exactly what the MSLA had hoped for. “By making it harder to win a jackpot, the tougher odds made the ever-larger prizes inevitable,” writes the AP’s Scott McFetridge. “The record jackpot lured an unprecedented frenzy of purchases.”

You will not win the Powerball—and even if you do win, you will lose.

The fever swamp of the MSLA-engineered New Year’s lottery mania is arguably the finest distillation of human irrationality in the modern era. It’s become objectively harder to win the Powerball jackpot, yet we shell out more money than ever before (likely emboldened by the taste of dumb luck with the more ubiquitous $4 payout); even though lotteries are notoriously corrupt and often fixed, we put our trust in a twisted system; and even though the lottery iseffectively a regressive tax on the poor, households that make less than $12,400 a year on average still spend five percent of their income on lotteries, according to Wired. In the lottery, as with casinos, the house almost always wins, yet our insane hope that blind, cosmic luck might work in our favor spurs us to spend our last dollars on a sliver of chance.

Why do we do this to ourselves? Psychological literature offers a variety of explanations for this sort of irrational behavior. A 2008 experimental study in theJournal of Behavioral Decision Making found that lottery patrons (even those made aware of their low-income status) play such unlikely odds because “everyone has an equal chance of winning the lottery.” But the reasons are more complex than simply a golden ticket for the poor: A 2012 study in the Journal of Gambling Studiesfound that “increased levels of lottery play are linked with certain subgroups in the U.S. population—males, blacks, Native Americans, and those who live in disadvantaged neighborhoods.” It’s economic and social dislocation that drives us to engage with the lottery. As Stephen Goldbart writes in Psychology Today: “It is so much fun to play with the ‘what if I won’ scenario, to imagine what it would be like to live your dreams, to have the money that will purchase not only a fantastic fantasy ride, but also give you a respite from the conflict, complexity, and angst of everyday life.”

The confluence of our contemporary political and economic malaise and the lottery mania wrought by the MLSA’s deliberate rule changes are a simple reminder that, psychologically, the Powerball is essentially a con, “the oldest story ever told,” as Maria Konnikova writes in her book The Confidence Game. “The story of belief—of the basic, irresistible, universal human need to believe in something that gives life meaning, something that reaffirms our view of ourselves, the world, and our place in it.” This isn’t to accuse the MLSA of fraud—yes, some of the most virulent con artists of our time do so within the legitimate spheres of politics, business, and law; it just understands our hopes and dreams (and how to play on them) better than we do. Consider the fascinating career of Rebecca Paul Hargrove, president of the Tennessee Education State Lottery Corporation, who built the Georgia and Florida lotteries into state lottery powerhouses. “If you made a logical investment choice, you’d play a different game,” she told Nautilus in 2013. “It’s not an investment. It’s entertainment. For a very small amount of money you might change your life.”

Even the mantra of “changing your life” is something of a con itself. The sad truth of lottery winners is that their lives don’t always end up as idyllic as they might imagine, many of them becoming not only the target of a massive tax burden and low-level scam artists, but also a magnet for their own vices. Suzanne Mullins won the Virginia lottery in 1993 and ended up paying out a $154 million settlement to a loan company after going deeply into debt; Evelyn Adams gambled away $5.4 million in Atlantic City; Willie Hurt blew $3.1 million on a crack addiction. Even Pentecostal preacher Billy Bob Harrell Jr.’s generosity after winning a $31 million jackpot in 1997 became his undoing—he simply couldn’t say no when people asked for a handout, and ended up killing himself after his money (and wife) ran out. Those who were saddled with these Pyrrhic victories over the odds may advise that Powerball’s new jackpot odds might actually be good for the poor, huddled masses looking for luck.

This is the fraudulent reality of the lottery: It’s a no-win scenario for the people who play it, no matter what. We don’t just play because we’re poor or marginalized, but because we have nothing else. “It’s not who you are, but where you happen to be at this particular moment in your life,” Konnikova writes in The Confidence Game:

If you’re feeling isolated or lonely, it turns out you’re particularly vulnerable. Likewise if you’re going through a job loss, divorce, serious injury, or other major life changes, are experiencing a downturn in personal finances, or are concerned with being in debt. People in debt, in fact, are also more likely to fall for fraud that’s completely unrelated to finances.

Take this as a warning: You will not win the Powerball—and even if you do win, you will lose. Please don’t fall for the oldest trick in the book.

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