Selling Hope: State Lotteries in America by Charles T. Clotfelter and Philip J. Cook (Harvard University Press: $29.50, 316 pages)
Every Wednesday and Saturday, I play the same six numbers in the state lottery--the birth dates of my wife and children. If "my" numbers come up, I will be ready and waiting. And I never fail to play--I am always mindful of the punch line in the joke about the pious man who prays to God to let him win the lottery, and then complains when his prayer goes unanswered.
"Work with me on this one," the Almighty says. "Buy a ticket."
I am hardly alone in my prayerful but primitive attitudes toward the lottery, as I learned in "Selling Hope," a scholarly but surprisingly readable study of state lotteries by Charles T. Clotfelter and Philip J. Cook. Many lottery players consult "seers, numerologists and pseudoscientists" in an effort to find their own "lucky numbers"--and the sober bureaucrats who run the lotteries do nothing to discourage them: "If anything," the authors point out, "they seek to encourage magical thinking."
Although "Selling Hope" is a serious work of economic research, the authors bring a lively curiosity and an engaging style of writing to their work. Cook and Clotfelter, a couple of economists and public policy experts at Duke University, approach the subject of state lotteries as "a historical curiosity, a cultural phenomenon, a rapidly evolving new industry, and a consumer craze," and they manage to capture all the irony and intrigue of their subject. For example, they include the obligatory charts and graphs of an economics monograph, but their statistical data is unusually lucid and diverting--the most popular number in one recent study of lottery betting, they disclose, was "333," while the least popular was "092."
The authors point out that "Lotto fever" has infected state governments across America: "For the first six decades of the twentieth century lotteries were banned in every American state," they point out. "Yet today three-fourths of the U.S. population lives in states where lotteries are not only legal but provided by state government itself. . . . They have gone into business selling a popular consumer product, and they have carried on with Madison Avenue gusto and an unfettered dedication to the bottom line."
Lottery revenue is a fairly minor item in most state budgets--an average of 3.3% of all revenue in states with lotteries in 1986. On average, only 38 cents out of every lottery dollar actually reaches the state treasury; the rest goes for prizes and overhead. But the authors remind us that the lottery is among the most visible--and the most popular--of state-provided services: "In terms of state products that citizens purchase directly," they point out, "the lottery ranks second, right after higher education."
The real constituency for public lotteries turns out to be the corporate interests that stand to gain by the adoption of legal gambling. Scientific Games, a major supplier of lottery equipment, and Southland Corp., owner of the 7-Eleven chain, "have been active supporters of lottery adoption campaigns." A spokesman for Scientific Games, which sponsored the initiative that brought the lottery to California in 1984, explained the simple economic principle behind the company's efforts: "If lotteries are your only business, then you expand your business by legalizing lotteries."
Of course, the state lottery is in direct competition with that old favorite of organized crime, the numbers racket. Ironically, the authors point out, the intense advertising efforts of public lotteries--and the announcement of computer-generated winning numbers--have actually made it easier for racketeers to run illegal numbers games. And so the managers of state lotteries, goaded by competition from their underworld rivals, are impelled to "at least match the rates offered by illegal games."
An even greater threat to the bottom line is sheer boredom. Nowadays, the authors point out, state lottery managers find themselves in the same marketing dilemma as fast-food chains--they must work hard to stimulate the appetites of their customers by coming up with new and ever more provocative "products" and ever more bewitching (if often manipulative or outrightly fraudulent) advertising and promotion.
Thus, for example, the state lottery operators routinely fail to reveal that the actual "present value" of a multimillion-dollar jackpot is half as large, since the prizes are paid out in interest-free installments over 20 years. At least one critic has accused state lottery officials of "persistent, underlying bad faith" in their seductive but misleading advertising.
The target of all this hype, not surprisingly, turns out to be men and women who can least afford the dollars that are poured into lottery gambling. A 1984 Maryland survey revealed that "respondents with incomes below $15,000 . . . played more than those with higher incomes--indeed more than twice as much," the authors report. In other words, the ultimate irony of the state lottery is the cynical selling of hope to the hopeless by tax-supported civil servants.
I found "Selling Hope" to be enlightening, even entertaining at times, and full of good reason for outrage over the lottery. Still, it is Wednesday, Lotto Day--and I'm off to Bob's Market to play my lucky numbers. Clotfelter and Cook eloquently remind us of Pope's words--"Hope springs eternal in the human breast"--and they allow us to understand that the human brain has very little to do with it.