The CA Lottery sells false promises to the poor. Let’s finish



Editorials and other Opinion content offer perspectives on issues important to our community and are independent of the work of our newsroom journalists.

A man leaves a Sacramento store after purchasing lottery tickets in January.

A man leaves a Sacramento store after purchasing lottery tickets in January.

In June 2019, The Sacramento Bee editorial board called for reforms in the payday lending industry, asking, “How much greed is enough?” That’s the question Sacramento lawmakers must ask the predatory lending industry – and themselves. “

When the reform law, Assembly Bill 539, was passed and signed by Governor Gavin Newsom that year, making the licensing and regulation of lenders mandatory, lawmakers welcomed protect consumers from financial predators. They were right to act. The payday loan industry was a legalized racket that took advantage of the poor financial decisions of low-income Californians.

For all of the same reasons, lawmakers should take action to shut down the California Lottery.

It is no exaggeration to say that the California State Lottery is a tax on poor Californians. After all, a state entity collects revenue, nominally for education, by selling the false promise of enrichment. Study after study, the victims of this Ponzi scheme are the lowest socio-economic groups in our state. In a 2012 study, researchers found that the poorest 20% of residents had the ‘highest lottery gambling rate (61%) and the highest average level of gambling days during the year. past year (26.1 days) ”.

When you extrapolate these results to populations and the California Lottery scale, it becomes clear that most of the income generated comes directly from the pockets of poor and less educated Californians.

While many are convinced that buying a lottery ticket is an investment, doing so is simply illogical. From an economic standpoint, we should consider the expected value of buying a $ 1 lottery ticket. Considering the hundreds of millions of chances of winning the lottery, the expected value of spending $ 1 is much less than $ 1, and that’s before you consider the huge tax bill that comes with a big win.

Yet, according to a 2019 study, 75% of lottery players believe they will win a cash prize. Previous studies have shown that the lower the respondent’s income, the higher the mistaken belief of winning the lottery. This is no surprise, as the California Lottery is spending hundreds of millions of dollars on advertising designed to sell this fake story.

The state lottery will highlight $ 37 billion sent to public schools. But at what price and from whom? If the sole purpose of the lottery is to fund schools, it is the most regressive tax in California history.

In a state that prides itself on its deep commitment to fairness, how can we continue to allow low-income families to bear the brunt of this supposedly critical line of funding?

Perhaps most disturbing, the lottery presents a misconception that people can play to get out of poverty. This economic mobility happens by chance.

Economic anxiety has dominated US politics for the past decade. Many Americans doubt the next generation will be any better than those that came before it. The California Lottery knows this and thrives on this anxiety. This is totally counterproductive to the goal we should all share: expanding economic mobility for all.

To lift people out of poverty, which would also increase state revenues, perhaps we should instead be making a much safer bet – a bet that invests in entrepreneurship and educates Californians about it. how to make better financial decisions.

Matt Rexroad is a California political consultant with expertise in redistribution and independent spending. He is a former supervisor of Yolo County.

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