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If a lottery is encouraging addictive gambling, don’t expand it!

This story from Vivian Yee seems just horrible to me. First the background:

Pronto Lotto’s real business takes place in the carpeted, hushed area where its most devoted customers watch video screens from a scattering of tall silver tables, hour after hour, day after day.

The players — mostly men, about a dozen at any given time — come on their lunch breaks or after work to study the screens, which are programmed with the Quick Draw lottery game, and flash a new set of winning numbers every four minutes. They have helped make Pronto Lotto the top Quick Draw vendor in the state, selling $3.3 million worth of tickets last year, more than $1 million more than the second busiest location, a World Books shop in Penn Station.

Some stay for just a few minutes. Others play for the length of a workday, repeatedly traversing the few yards between their seats and the cash register as they hand the next wager to a clerk with a dollar bill or two, and return to wait.

“It’s like my job, 24 hours,” Pablo Martinez, 42, joked to an employee on a recent afternoon, flicking yet another losing ticket into a trash can. He had been there since 10 a.m., and did not leave until dinnertime.

Then comes the kicker:

Quick Draw has been so popular since its introduction in New York in 1995 that Gov. Andrew M. Cuomo has proposed eliminating the last remaining restrictions on where the game can be played.

Say wha…? The program is successful fleecing money from addicts, so they want to expand it?? I understand the virtue of the state lottery as a legal alternative to mob-controlled gambling, but I’d think the best public policy would be to make it as unappealing as possible, subject to the constraint that it remains a legitimate alternative. The idea is to give the gambling addicts something to do that does the least damage to them. A sort of low-tar cigarette, if you will. If people start playing a state lottery obsessively, then it’s time to tweak it to make it less appealing to the addicts.

32 Comments

  1. Morgan Price says:

    Low-tar cigarettes are just as deadly as other cigarettes.

  2. If the government were to cover the costs of gambling addictions, then its incentives to promote addiction would decline. Seems like we should fight the lottery by asking government to pay for gambling anonymous programs and insurance for addicts who lose everything.

  3. John Christie says:

    Isn’t there necessarily going to be a correlation between anything that allows people to get more involved in, or enjoy, or increases access to gambling and problem gambling? Doesn’t it necessarily follow that saying they shouldn’t expand something that makes the experience more enjoyable and desirable for gamblers also means they just shouldn’t run it at all??

    • Andrew says:

      John:

      Maybe. But I can see the argument that a weak but not completely ineffective form of legal gambling could be enough to keep people away from the dangerous illegal stuff.

      • Tom says:

        I’m struggling to think of a vice that this doesn’t apply to – as soon as there is something that is illegal and people want to pay to do then my guess is that it will encourage a level of criminality unless there is a licenced form of the vice.

        • Mark Palko says:

          Tom,

          We have a wealth of recent natural experiments in the effects of decriminalizing (and, to a lesser extent, criminalizing), I have to think someone has looked into this.

  4. zbicyclist says:

    Conservatives and liberals disagree with the proper size of government, but there would be general agreement that the purpose of (western democratic) government is something along these lines:

    “We the People … in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish…”

    Fleecing addicts is not in there, and is fundamentally immoral. The state restricts gambling in the first place in order to protect its citizens. For the state to try to maximize revenue from the weak is immoral.

    • Wonks Anonymous says:

      The preamble is for the U.S constitution, and lotteries are run by state governments. They have their own constitutions, though I don’t know what NY’s describes the purpose to be.

      I would also think that extracting revenue from the weak has always been part of statehood!

    • Steve Sailer says:

      “to ourselves and our Posterity”

      Funny how nobody remembers that part when it comes to thinking about immigration policy.

  5. Millsy says:

    There is plenty of beef to be had, but I’m not sure it’s “fleecing” in the traditional sense of the word. They are not being defrauded in any way.

    However, if the purpose of government is to promote welfare, then this probably isn’t good practice. The idea behind government revenue is generally to correct externalities created by the markets and/or redistribute at the level of progressivity that society deems acceptable. Unfortunately, we know that these sorts of revenues tend to be regressive in nature, which is where the problem lies in hosting the in the first place.

    • Wonks Anonymous says:

      Regressivity in revenue-generation isn’t really a problem, provided that redistribution is progressive. European countries tend to have more regressive tax systems (necessary if you want larger revenues), but they spend it more focused on the poor rather than the elderly (and military).

  6. Morton says:

    The work of social-engineers and politicians is seemingly never done… because there’s so much in human nature to correct with laws, policemen, and prisons.

    But if it is bad and illegal for private citizens to “gamble” on their own… how can it suddenly become good and legal when state politicians run the gambling. The premise of anti-gambling laws is fundamentally irrational.

    Mob-controlled gambling is not the default alternative to politician-controlled gambling — Las Vegas, office sports pools, friendly poker games, etc. are.

    So-called gambling “addiction” is merely a bad habit pursued by a very small minority of gamblers. Those few could choose to act differently, but society in general should not be penalized for their lifestyle choices.

    • Andrew says:

      Morton:

      When you say “So-called gambling ‘addiction,’” I assume you’re talking about what the rest of us simply call, gambling addiction? I do see, however, that it’s also called “pathological gambling” and is “considered by the American Psychiatric Association to be an impulse control disorder rather than an addiction.” Whatever.

      • Fernando says:

        Well, I think it is a fair point to ask what is an addict or not. This is not to say there is no gambling addiction problem, but simply to question that every person who gambles a lot is an addict.

        PS Psychiatrists are infamous for “inventing” diseases. They have incentives too, you know: http://www.naturalnews.com/disease-mongering-engine.asp (ok, over the top, but you get the point)

  7. If you believe that the capitalist system, after some redistribution, works efficiently to distribute resources, I don’t see how you could fail to be worried about large scale gambling.

    Since almost as far back as we can look, statesmen have realized that they are supported by productive citizens – raising the supplies for their armies, raising children sturdy enough to serve in those armies, and so on. To the extent that a Father’s misallocation of time and money harms the education and upbringing of his children, the state – whether seen as a single King or a collection of all citizens – has cause to worry.

    • Steve Sailer says:

      The Battle of Guadalcanal did a lot for cross-class solidarity in America.

      But if there aren’t going to be anymore important wars, who cares about our fellow citizens? Why not rip them off just because they aren’t very bright?

  8. Steve Sailer says:

    A common denominator is the growing elitism of elite opinion. Gambling is seldom a problem for the right sort of educated people, so who cares if a whole bunch of proles are wrecking their lives with it?

    It’s hard to imagine, say, Frank Capra ultimately siding with that view, but as elite opinion becomes more globalist and less patriotic, the more natural it seems for us smart people to exploit suckers to help pay your taxes for you. If they didn’t deserve to be exploited, they wouldn’t be such suckers, right?

    • Rahul says:

      Contrast this with public-smoking-bans. I think the elite pushed those more and the blue-collars opposed them?

      • John Mashey says:

        Well, actually, the real opposition was the tobacco industry, but since they are likely the “best” marketeers in the world, they have always been very clever to work behind the scenes, their beset tactic being the multi-decade effort to create the Tea Party or equivalents, starting back in the 1980s.

        The analogy to gambling might be if government said: well, people want to smoke, so we might as well make cigarettes, although in some cases, given lobbying and taxes, local governments in particular sometimes approximate that. Of course, in China, the big tobacco companies are state-run entities. Andrew has mentioned Bob Proctor’s Golden Holocaust, before, a great source.

        Nicotine addiction is mostly physiological, acquired during brain development, rarely afterwards (i.e., msot peopel start as children, few later, and the latter find it easier to stop). I don’t know enough abotu gmablign addiction to compare. Maybe some other reader can give us some cites.

      • zbicyclist says:

        No. Nonsmokers pushed them, smokers opposed them. These groups may likely have a correlation with elite / blue collar but aren’t the same.

  9. fernando says:

    This comment belongs in another post but is closed to comments http://andrewgelman.com/2012/10/30/real-rothko-fake-rothko/

    You don’t need to buy a 100 day 10 hour clock, you can make one with a 3D printer and run it using a Raspberry Pi.

    You could also make a clock that displays time as a bar code that only those with a certain phone app can read. That would be cool.

  10. TBW says:

    Why make it unappealing, why not make it as harmless as possible ? I think even the mob would be embarrassed by the take out in state lotteries. If the state was really interested in not hurting addicts, they would make the lotteries non-profit and make it the best game in town in terms of take-out. If the take-out was 0.5% instead of 50%, addicts would certainly be better off. Couple that with some sort of maximum bet and then you would really be limiting damage to addicts.

  11. ezra abrams says:

    statistical alert!!!
    Reporting Bias !!!
    They have helped make Pronto Lotto the top Quick Draw vendor in the state, selling $3.3 million worth of tickets last year, more than $1 million more than the second busiest location, a World Books shop in Penn Station.

    IN ALL OF NEW YORK STATE

    Are not these people adults ?
    Don’t they have the right to gamble or take dangerous drugs, or not buy life insurance if married, or not buy long term disability insurance to cover the largest financial asset they own (their ability to work) if they want to ?
    Who are we to tell someone what they can or cannot do ?

    I don’t like gambling or heroin, but I don’t see why either should be illegal

    I think a liberal response would be to ask, can we make our society better, so that people don’t feel the need to spend hours in a squalid place gambling.

  12. ezra abrams says:

    SORRY,something worng with my browser, meant to say
    in all of new york state, this is the BIGGEST place, 50% larger then the next guy (2.3 to 3.3 million/year is 50% jump…)

  13. Jonathan (a different one) says:

    Don’t we need to know how many people are addicted gamblers? There are two purposes for state-run lotteries: reduction of profits for illegal lotteries and revenue generation. Against this are the enabling (perhaps) of gambling addiction and the imprimatur of the state for what is an (on average) money losing porposition for citizens. I don’t know how how decide whether lotteries should be expanded or shrunk without some measure of the costs and benefits. Just looking at one set of costs (without even quantifying the magnitude) doesn’t get you there.

    • zbicyclist says:

      It’s very unclear that there’s less illegal gambling. Gribben and Bean report:

      “Moreover, lotteries often do not decrease illegal gambling. In fact, lotteries may unintentionally increase illegal gambling.”

      http://www.independent.org/pdf/tir/tir_10_3_03_gribbin.pdf

      “Rep. Giorgi declared that the lottery would “cripple syndicate gambling operations” (Seslar 1972a). The evidence does not support this justification, however. In fact, it indicates that the legalization of gambling brings about the reverse: a growth of illegal gambling (Weinsetin and Deitch 1974; Kaplan 1984; Thomas and Webb 1984).

      There is a lack of research systematically examining how the lottery has affected illegal gambling in Illinois.6 However, in 1988 Sharon Sharp, director of the Illinois lottery, estimated the state was losing approximately $200 million a year to illegal lottery activities (qtd. in O’Brien 1988). This amount equaled approximately 30 percent of the Illinois lottery’s annual net revenues.

      In 1989, the Chicago Police Department uncovered an illegal lottery operation that it estimated was taking in about $3 million a year (Gorman 1989).

      The investigation also revealed that the illegal operation had the following advantages over the legal lottery: “the illegal operators had bigger payoffs, winnings were delivered each day in cash, wagers were taken over the telephone, credit was extended and bettors could avoid reporting their winnings for income tax purposes” (Koziol 1989).”

  14. John Mashey says:

    ‘The methods for human population control are enormously controversial. One contraceptive measure seems to be humane and acceptable: If you teach calculus to teenage girls, they go on to have far fewer babies. Calculus is the contraceptive of the future. It doesn’t work for boys.
    - Kenneth Deffeyes, Beyond Oil: The View from Hubbert’s Peak, 2005′

    In this case, perhaps teaching probability and statistics more widely in high school would:
    a) Likely have a similar contraceptive effect
    b) Be more useful to many students than calculus
    c) And learning about expected values might reduce the prevalance of gambling, at least of this sort

    (i.e., where no particular skill is involved, and one is not getting meals cheaply by visiting casinos)

  15. Marilyn Lancelot says:

    Sure, everyone loves to gamble . . . if they win. But, the person sitting next to you in church, the man in line at the grocery store, or one of your co-workers; any one of these could be involved with a gambling problem. Imagine your grandmother committing a crime to support her gambling addiction. I am a recovering alcoholic, gambler, and have recovered from other addictive behaviors. I published a book, Gripped by Gambling, where the readers can follow the destructive path of the compulsive gambler, a prison sentence, and then on to the recovery road.

    I recently published a second book, Switching Addictions, describing additional issues that confront the recovering addict. If a person who has an addictive personality, doesn’t admit to at least two addictions, he’s not being honest. Until the underlying issues have been resolved, the person will continue to switch addictions. These are two books you might consider adding to your library. I also publish a free online newsletter, Women Helping Women, which has been on-line for more than twelve years and is read by hundreds of women (and men) from around the world. (www.femalegamblers.info). I have been interviewed many times, and appeared on the 60 Minutes show in January 2011, which was moderated by Leslie Stahl.

    Sincerely,

    Marilyn Lancelot

  16. My understanding from a close reading (more than 20 years ago, so I may mis-remember) of the Autobiography of Malcolm X is that the illegal numbers racket provided customers with a much better expectation value than the NY State Lottery Numbers games.

    • Andrew says:

      I recall reading somewhere that the illegal number paid 600 to 1, while the lottery pays 500 to 1, in both cases for a 1/1000 probability bet. On the other hand, the illegal number might not pay. I think the numbers game was featured in the Valachi Papers as well.