Hitting the Jackpot

May 10, 2000 at 12:00 AM EDT

SPOKESMAN: Somewhere in America, moments from now, there could be a new multimillionaire!

MARGARET WARNER: Millions of people tuned in last night to see if they had picked the lucky numbers. At stake: A jackpot worth $363 million.

CLERK: $60, big game?

MARGARET WARNER: An estimated 30 million to 40 million Americans bought tickets for the so-called “Big Game,” a lottery sponsored and managed by seven states: Georgia, Virginia, Illinois, Michigan, Maryland, new jersey, and Massachusetts. The prize amount kept growing when earlier drawings failed to produce winning tickets, but last night, there were two. The holders of the two winning tickets haven’t claimed their money yet, but the person who sold one of them, the owner of Sweeney’s Citgo station in the Chicago suburb of Lake Zurich, got a bonus check today from the Illinois Lottery Commission.

LORI MONTANA: Today is a very, very special day here in Lake Zurich, because we are presenting the largest check to a retailer, of course, that we have ever presented.

MARGARET WARNER: The other winning ticket- seller, Mr. K’s Party Shoppe in suburban Detroit, wasn’t as lucky. Michigan will pay him only $2,000. All week, people have been waiting in long lines to buy the $1 tickets.

MAN: Beautiful day to be a millionaire. Thank you. See you.

WOMAN: That is 100 tickets. Those are for me, and the rest are for my bosses.

MARGARET WARNER: Sales were brisk, despite the long-shot odds of winning– 76 million to one.

MAN: I think it’s a little silly. I don’t know. It’s too… Like, it’s too hard to win. You have a better chance of getting hit by lightning.

MARGARET WARNER: Last night’s jackpot is the biggest ever in the U.S., topping the $296 million won two years ago by 13 machine shop workers in Ohio. New Hampshire launched the first state lottery in 1964. The phenomenon quickly mushroomed. Now 37 states, plus the District of Columbia, sponsor lotteries, in which last year Americans wagered some $36 billion. (Cheers) The phenomenon is big abroad, too. Last December, the biggest jackpot ever, some $1.2 billion in prizes, was awarded in the Spanish lottery game called El Gordo, or “The Fat One.” States in the U.S. siphon off a big take from ticket sales– between a third to a half, by most estimates. That amounted to about $13 billion last year. Some states earmark the money for special purposes. In Georgia, it’s pre- kindergarten schooling, and so- called Hope college scholarships for deserving students. Lottery officials said about one-third of the proceeds from yesterday’s Big Game will go for state programs like that. The rest will go for prizes and administrative costs.

MARGARET WARNER: For some insight into lottery fever, we’re joined by Greg Ziemak, president of the North American Association of State and Provincial Lotteries, and executive director of the Kansas Lottery; Edward Looney, executive director of the Council on Compulsive Gambling of New Jersey; Alan Wolfe, a social scientist, and the Director of the Center for Religion and American Public Life at Boston College; and Tyler Cowen, professor of economics at George Mason University, and the author of “In Praise of Commercial Culture.” Tyler Cowen, there are some estimates that as many as 30 million, maybe even 40 million Americans bought tickets for this. Either they live in those seven states or they came from neighboring states. How do you explain this? What is the appeal?

TYLER COWEN, George Mason University: People play the lottery because it’s fun. Every year over a thousand Americans become millionaires by playing the lottery so even if you don’t win, it’s something you can hope for, something you talk about. You talk about how you spend the money. But most of all people like being part of a wave of collective enthusiasm. It’s a modern form of tribalism, akin to celebrity. People like to participate in a collective endeavor in modern society, and this is the lottery.

MARGARET WARNER: Greg Ziemak, I assume you know your target audience, you advertise to the target audience. Is this what’s driving them — a sense of fun, wanting to be part of kind of a collective fad?

GREG ZIEMAK: Lottery is entertainment. People enjoy playing. The Gallup Poll that was taken in 1999 show that 57% of the people who were interviewed had played the lottery within the last year. The poll also said 75% of the people in this country think of lottery as a good way to raise revenues for the state. The bottom line is it’s entertainment and they enjoy it. They enjoy the play.

MARGARET WARNER: Edward Looney I read the same poll. 57% of Americans have actually played the lottery. What is the psychology of this?

EDWARD LOONEY: I could tell you that 80% of the people do have fun with it. But there’s another group of people called problem and compulsive gamblers. 15% of the people who gamble on lottery have problems with it. There’s about 5% of those are what they call compulsive gamblers. These are people that are basically in the grip of an illness. And basically they can’t stop. So it’s not a social or a fun thing for them. I guess we have a responsibility to, you know, do something and do something more than they’re doing right now for lottery.

MARGARET WARNER: What are your insights into the 80% who up wouldn’t consider problem or compulsive gamblers, why they’re in it?

EDWARD LOONEY: Well, I think people are there for fun and for games and for excitement. Win or lose it’s a fun thing. I think the people that lost that are compulsive gamblers are having a rough day today. They’ve gambled more money than they can afford. Many times it’s the lower-income folks who bought those extra quarts of milk that they could have bought with that food that really are being affected by it. Again the Big Game really attracts the higher-income people which is really is marketed to the people that don’t buy lotteries traditionally — the $50,000 and up people who now come into this picture and really pump up that prize.

MARGARET WARNER: Along Wolfe, address this how much fun this is. When I read interviews of people buying the tickets, they say they’re having fun. But also there’s a lot of yearning there. They tell interviewers what their dreams are, what they’re going to do with the winnings. They’re going to quit work and they’re going to buy that house in Florida. Isn’t there a lot of yearning here?

ALAN WOLFE: Yeah. I think the word of the other people who have spoken that it’s fun. I personally don’t find it fun. I’ve never actually done it. I’d rather hold on to my money than give it away to people that are interested in taking it from me. But even if it is fun, there are lots of things in our society that we try to discourage — even things that people enjoy. We set rules that block the buying and selling of all kinds of things. We don’t want women to sell their bodies for a price. That’s called prostitution. We don’t think people should be able to buy and sell their military obligations to their society. The question is whether the lotteries represent the sale of things that we ought to encourage, like air conditioning or cars, or whether it represents something we ought to discourage like prostitution. I lean very much in the latter direction.

MARGARET WARNER: And what is it that you think the lottery is selling that should be discouraged?

ALAN WOLFE: A sense of irresponsibility about money primarily. I think that we are a society that has established the truth over the centuries and that is that money is hard to come by. It’s something that you have to earn by the sweat of your brow. The idea that there’s easy money out there that you can get just by the pure random chance is destined to create illusions in people and I don’t think that people should live by illusions. I think people should live in reality.

MARGARET WARNER: Now, as an economist Mr. Cowen, do you agree with that or is there something to that, that people are being sold a fraud essentially and something that encourages them to think that they can get something for nothing?

TYLER COWEN: Any area that is fun, we will find excess and mistakes. We find this with food. There are people who eat too much food. They abuse the market for food. They do damage to themselves but we do not as a result condemn food. The problem is the excess. Lotteries are for most people fun. And my vision of a free society is one where people are able to choose the kinds of fun they have, provided they do not infringe upon the rights of others. Lotteries clearly meet that classification, and I believe the government should do nothing to prevent private entrepreneurs from offering lotteries.

MARGARET WARNER: Mr. Ziemak, give us a better profile. 57%, as I said, I saw the same poll, a lot more people play the lottery than any other form of gambling — I mean casino or, I don’t know, playing horses or betting on sporting events. Of the people who play the lottery, it’s pretty broad based. Who are they?

GREG ZIEMAK: In Kansas, we find that 51% of the people who play lottery are male, 49% female. Over 93% of our players have a high school education or above. 82% have salaries of $20,000 and above. So, the majority of our play comes from mostly the middle income and upper-middle income players.

MARGARET WARNER: And so you don’t ascribe to the argument that only the poor… or that are the poor are being kind of snookered in here?

GREG ZIEMAK: Not at all. Of course, lower-income people play but certainly that is their right to play. No one ever said that if you don’t have money, you’re not intelligent and you can’t make decisions that affect your life. We allow low-income people to get married and vote. So they should be able to spend $1 or two on a lottery ticket.

MARGARET WARNER: Edward Looney, where do you come down on that question? The same Gallup poll which looks at who played the lottery found that two-thirds of the people in the $4520,000-$45,000 a year bracket had bought lottery tickets more than poor people.

EDWARD LOONEY: I can tell you public policy. Here we have a government that is controlling an activity that is addicting to a certain amount of people. I think they have a higher, a higher sense of doing something better than they’re doing. I think we’re not for or against gambling. I think that people want to gamble. They voted it in. But what they voted in 20 years ago in New Jersey, you can walk into a lottery agent and you cannot only get pick three, pick four, pick your nose, they’ve got all kinds of scratch-offs. You have 45 different products. And I think that you have no competition. This is the government and it’s promoting this activity that’s recognized since 1980 as an impulse-control disorder that affects a significant number of people. We need to do better public relations. We have to do better what they call responsible gaming. New Jersey is doing some things and they’re doing some things in Ohio. They’re doing some things in Kentucky where they’re doing PSA’s saying there is a down side to this and if you have this problem there’s help available. Most states don’t do anything. I think we need to do more of that. Let’s have as much lottery as we want, but let’s do inclusive of the people who are addicted to gambling.

MARGARET WARNER: Alan Wolfe, do you have a problem with the state, particularly the state sponsoring this kind of gambling? I mean as opposed to other gambling where the state isn’t involved?

ALAN WOLFE: Yeah, I have a big problem with the idea of the state sponsoring it. I think that government does a lot of things, but one of the things that government does, it stands for the collective moral principles of the society. When government endorses something, it’s generally saying that it’s a good thing. When government prohibits something like crime or murder, it’s saying it’s a bad thing. The idea that government is officially recognizing and indeed is dependent on an activity that brings out some of the people’s most short-sighted and irresponsible actions tells us that as a society we don’t believe in the value, for example, of saving money so that your children can benefit from it in the future. We’re saying that as a society we stand for the principle that you’re free to indulge your instincts without any sense of responsibility for other people and indeed at great harm to yourself. I think there’s something seriously wrong with that.

MARGARET WARNER: So you’re saying that you think having the state sponsor it has removed the social stigma from it.

ALAN WOLFE: Absolutely. In fact, what happens when the state sponsors a program, we can talk about the state being neutral, we can talk about the state being against something or we can talk about the state sponsoring it. This kind of active state sponsorship makes government, in fact, makes all of us dependent on the state, encouraging people’s worst impulses. In European countries, for example, states collect huge amounts of money from tobacco taxes and from alcohol consumption and the tax on that. And what happens then is government has to encourage people to smoke and then has to encourage people to imbibe alcohol in order to finance its activities. We’ve seen this huge mushrooming of lotteries from one state to another. We’ve seen a growth in the lotteries because state governments have become dependent on this form of activity to finance themselves.

MARGARET WARNER: Greg Ziemak, you and your colleagues are in fact in the business of promoting this heavily, aren’t you?

GREG ZIEMAK: Yes, we do. We promote it on average advertising budget 1% of our total budget. I would like to respond to that gentleman before me. As you know in this country democracy is of the people. 23 of the 38 lotteries in this country were voted in by the public. So the public likes to play the lottery. Obviously the lottery industry is aware that there are problem gamblers and in 1988 spent over $19 million combined to try to address this problem and every year is doing more and more to do this. So we recognize that problem. We do not want to take advantage of anyone who shouldn’t be playing. We also know that the vast majority of people, over 98% gamble and gamble responsibly and deserve to play if they want to spend a few dollars.

MARGARET WARNER: Mr. Wolfe, a brief supply on that one that in many states the public voted for it.

ALAN WOLFE: The public does vote for all kinds of things. I still think the question is, you know, do we want our government to just simply be a kind of like a black computer box. It takes all the inputs that come in and then says, “okay, that’s what public policy is going to be”? Or do we want our public officials to think about what is good for the society and to encourage people to go beyond their initial instincts and think more deeply about what their obligations are. I prefer very much that kind of model. If gambling is that popular, then clearly it’s responsive to something, but there are a whole lot of other options and a whole lot of other issues that we ought to be discussing that we’ve never essentially discussed as this thing has mushroomed throughout the society.

MARGARET WARNER: Mr. Cowen, how do you feel about the state being so involved in this?

TYLER COWEN: There’s nothing unusual or immoral about lotteries. Lotteries are a form of gambling. We gamble when we play the stock market, futures markets, options markets. We gamble when we take a new job or when we decide what school to go to. This is simply another form of gambling that some people with a relatively elitist outlook have decided they don’t like. My view is the problem with state involvement is simply that it costs too much. For every dollar that is spent the government is giving back people who buy tickets 55 cents. The market could do a much better job and give us better odds.

MARGARET WARNER: You mean because they’re siphoning off a big chunk for their extra programs or for general state revenues.

TYLER COWEN: The government is a monopolist. It runs the lottery to raise money for itself. There’s relatively little competition. Competition would give a better deal to people who buy lottery tickets.

MARGARET WARNER: What about that point, Mr. Ziemak?

GREG ZIEMAK: There’s no doubt that when lotteries were formed one of the main reasons was to produce revenue for the states. The average pay-off can go from 50%-60%. Some states pay as high as 75% in some of their scratch games. Every year as the years have gone by we have seen that the payout has been increased but the gentleman is correct. The purpose of the lottery is to raise revenue for the state. The lotteries do not hide this fact, and the people know that. And they still enjoy playing it.

MARGARET WARNER: All right. Mr. Looney, you have the last word. How good do you think the states are in addressing the problem gamblers that you are most concerned about?

EDWARD LOONEY: They would get about a 70 out of 100 right now in moving up. I think that the one percent of the people he’s talking about is higher than that. Most of the people, it was high anxiety the last two days. We were getting calls all over the place where people were calling up that were in recovery, that were very moved and very agitated because of all the hype about this. I think more has to be done in that area. I think they have to take the example of Kentucky. Some of the things that are happening in New Jersey where they’re doing responsible play — more of that has to be done — putting help numbers behind tickets. I think that, you know, the bottom line is that the government has a higher responsibility to do more than they’re doing. They’ve been chastised by the Federal Study Commission when they had the two or three year meeting when they came out with the lottery saying they should be doing more because they are a monopoly and are having a big effect on compulsive gamblers. These are sick people that need treatment. Instead of the 1% we’d like to have more of that for compulsive gambling.

MARGARET WARNER: Thank you all four very much.