Welcome back and a happy 2019 to all! We hope everyone had a lovely time over Christmas and New Year’s.
In the first part of this three-part article, we talked about Multi-Level Marketing companies (MLMs). Going into what they are, and why most people consider them to be a scam. However, in this part two, we will discuss a subject that isn’t quite as straight forward and simple as MLMs; that topic today is the Lottery.But just before we continue, don’t forget to refresh yourself on the definitions of scam and fraud which we went into in the first article. Also, for your convenience, here is the link to the legal definition.
I’m not talking about lottery scams, which is a sort of; advance-fee fraud/scam that is commonly found on the internet. That kind of lottery scam is when a person receives an email, a phone call or even sometimes snail mail, which contents inform the person that they have won some sort of prize in a lottery that they were entered into. And that all they need to do to claim their winnings, is to contact the company and pay some sort of “processing fee” or “transfer fee”. But once they do that, the winnings never arrive and the “winner” has just lost the “processing fee”, never to be seen again.
Here’s an example of a lottery scam:
This particular example is long, so the rest can be read here, but this should give you the rough idea of what lottery scams are trying to achieve.
So, I went into a bit of depth there about something I said we’re not talking about, but that’s okay as it’s more important that you’re aware of any form of scam that could happen to you, as well being clear on the difference when I start talking about the lottery. When I say lottery and ask at what point does it become a scam? I am talking about things such as the Powerball (USA), The National Lottery (UK), EuroMillions (Europe) and La Primitiva (Spain), are just a few examples of biggest national lotteries from around the world.
National lotteries are either organized and endorsed by the government themselves or at the very least legalized by the government. Such as Thailand’s official national lottery, which is administered as well as endorsed by the Government themselves through their Government Lottery Office (GLO). The USA’s Powerball is operated and owned by the Multi-State Lottery Association (MUSL), which is a non-profit government-benefit association between 34 states. Whereas the EuroMillions is run and operated by different organizations between several countries throughout Europe, though it has been said that a pension fund from Canada is the real owner, “not that it really matters”.
You’re probably wondering why we’re discussing the possibilities of the national lottery being a scam as it all seems pretty legit, especially if they are endorsed and organized by the government right? Well, let’s start off with what the statistics of winning the most popular national lotteries are. Sourced from an earlier 2018 article, it is said that the odds of winning the American Powerball’s grand prize are 1 in 292.2 million. Now let’s put that in perspective when was the last time you were struck by a bolt of lightning? Because the odds of you being struck by lightning are much higher than winning the Powerball grand prize. The below image is from a Google excerpt:
So, it means that the odds of you being struck by lightning are roughly 304 times greater than that of winning USA’s Powerball. In fact, there have been numerous articles all over the internet giving you statistics on more likelier things happening to you than winning the lottery, such as the odds of you being killed by a shark are 1 in almost 4 million. Imagine that! Being killed by a shark is 1 in 4 million and I bet you don’t even live next to the beach.
Another common question asked is: “Is the lottery rigged?” Once people take a look at the odds, they begin to realise that it seems impossible, and with the number of tickets sold every week, how come there aren’t more winners? I did a little bit of googling, curious to see what would come up in the search as well as other people’s opinions on if the lottery is rigged or not. Quora user Jack Nagy wrote a brilliant breakdown on why he believes the lottery itself is not rigged, because basically, it doesn’t need to be. “Lotteries aren’t rigged. They just may as well be”.
However, we can’t just go around calling the lottery a scam only because of its abysmal odds, right? Let’s have a quick reminder of the definition of the word scam;
I think the word; dishonest, in the definition, plays a vital role in whether if we can consider the national lottery to be a scam or not. This largely because of the fact that advertising of the national lottery is not prohibited in many countries. In fact, the amount of money and energy that goes into lottery advertisements in some places is quite substantial, and it plays a big factor in appealing to people to buy lottery tickets. A lot of these advertisements are condoned by the countries government and some even play a part in the advert production.
I googled; “lottery advert” and the first thing that came up was the following video.
For this video’s description, it reads: “Amazing things can happen when you buy a ticket. How would winning change your life?”
The video itself shows the life of two young parents, the husband of the family having to leave his family to go work on a fishing boat out at sea. The 2-minute video showed scenes of a young Mother having a tough time by herself with the kids and the Dad missing his family while out at sea. Emotional music plays as at the end it is revealed she won the lottery and they bought a new house, also implying that he now no longer needs to work away from the family for long periods of time.
So, what can I get from this? It’s a good video with all-around good production value. But I can’t help but feel that the ad is trying to prey on emotions. Particularly on the lack of security and happiness that the young mother and father is experiencing. Lack of security is something that anyone in financial woes experiences, as you are constantly wondering if you’ll be able to pay your rent and bills. While it’s not necessarily a scam as well as being seen quite commonly in the marketing world, preying on emotions and insecurities is a bit of a low blow, especially when it comes to someone’s financial insecurities.
Sometimes, you get the people that will tell you that it’s just spare change that they use to buy a ticket and do it for fun. It’s only a little amount of money, so if they lose, they don’t mind, but if they win, they can get themselves a new car, or pay off their mortgage, etc. etc. In other words, they have dreams and hopes, that they can do all of that. Assuming of course, that they win the lottery.
In response, I would like to post a 10-minute video, where Ian Carter of the YouTube channel iDubbbzTV complains and gives his thoughts on the lottery.
In it, he mentions that the Director of the NYS Lottery likes to use the line; “The great thing about buying a lottery ticket is the dream it lets you have.” And I believe that’s a perfect example of what I mean by the lottery likes to prey on people’s emotions.
And there are hundreds of lottery advertisements out there. In newspapers, on the internet, and on your TV. So, why can’t tobacco companies advertise on TV, but the national lottery can?
A Lottery is a form of gambling, or gambling is a form of lottery depending on how you want to look at it. This furthers the problem with national lotteries doing widespread advertising as it again preys on insecurities and emotions, only that this time it’s preying on somebody’s addiction or bad habit.
What exactly do I mean by a bad habit? Well according to Investopedia:
“In California, a study found that 40% of those who played the lottery were unemployed; in Maryland, the poorest one-third of its population buys 60% of all lottery tickets; and in Michigan, people without a high school diploma spent five times more on the lottery than those with a college education.”
If someone is already struggling with their personal finances, and they have the “opportunity” to get rich by only spending a couple of bucks, it is likely that they will act on their emotions and buy a lottery ticket. Unfortunately, this makes it easy to have it become a bad habit.
For those that are reading and don’t believe that the lottery is a form of gambling, let me tell you why it is. Both gambling and lottery involve taking risky actions by wagering money or something of value on an event with an uncertain outcome. That definition was pulled right from the Wikipedia, and guess what, it’s exactly what you do when you buy a lottery ticket.
You could even argue that buying a lottery ticket is somewhat even worse than “traditional casino gambling”, as the availability of lottery tickets are quite widespread and easy access to the public. Most convenient stores will have them, most likely including gas stations and like. Doing grocery shopping? You can get a lottery ticket. Driving down the highway and need to stop for gas and snacks? You can get a lottery ticket.
But is it a scam?
Let me turn your attention to this small article for a minute.
This article is talking specifically about the Powerball, where that lottery allows the option for players to buy “quick pick” tickets, which are basically “randomly generated numbers” instead of choosing your own. Well, Dawn Nettles, Founder of the Lotto Report, reported that there because there was a limited number of combinations that can be created for the Powerball, and over 440 million tickets were sold, there must have been something along the lines of 200 million duplicate tickets. However, that seems to be just the case for the Powerball. What about other national lotteries?
In this article, the opening paragraphs read:
“Statisticians tell you that you have a better chance of being hit by falling debris from an airplane.
Economists call it a tax on the poor because the least well-off among us spend a far bigger share of their incomes on it.
And it doesn’t ever matter.
As soon as the numbers grow big enough, tens of millions of Americans will head to their convenience stores for a virtually nonexistent chance to strike it very, very rich.”
I like those sentences and how they fit with my take on the lottery;
“A tax on the poor.”
“Virtually nonexistent chance to strike it very, very rich”
But, even after all of this, can we say that the lottery is a scam? Even though advertisements and such are somewhat dishonest, I don’t think it necessarily fits into the legal definition of a scam. However, just because it doesn’t fit the legal definition of fraud, I hope that this article has helped you take a moment to think about the subjective question of; at what point does it become a scam? Was the point at widespread advertisements preying on emotions and insecurities? Or is the point at the abysmal odds of winning?
For me? I’m inclined to personally think that the lottery is indeed a scam.
Cover illustration artist aeyeduh, DeviantArt