Lottery Fever

The Toronto Star reports that the government of Ontario is considering legalized online gambling.

http://www.thestar.com/news/ontario/article/844961--ontario-set-to-bet-on-legalized-online-gambling?bn=1

Ontario would be joining a trend towards expansion of government run gambling.  The government approach to many vices seems to follow a trend of initial prohibition followed by monopolization.  It is true of gambling and in certain places (Ontario) it is true of the distribution of alcohol.   One wonders if they will follow that approach to marijuana and prostitution if they should ever be made fully legal?

The arguments in favour of increased gambling rely mainly upon the fact that it is very lucrative for governments around the world.  Additionally, the age of the internet means that a jurisdiction that practices prohibition still sees their citizens gambling online through internet sites that are domiciled in more permissive jursidictions.

I did a google search on the demographics of lottery players.  I found a plethora of studies that found that lottery players tended to be less educated and have less disposable income.  It naturally follows (and several studies confirmed) that those who were of an ethnic group who were economically disadvantaged were also more likely to buy lottery tickets and to spend more.

This makes sense since lotteries offer hope.  It is natural that those who are poor and/or lacking in hope would grasp at a straw offering that hope.  I do see the good that comes from that.  It may be too much to lecture the poor that they should just save the $5 that they spend on lotteries weekly and put it into a savings account.  That kind of sensible advice is better received by those who don't need it as much.

Still I cannot help but feel that a lottery is an insidious form of taxation.  The profits flow to the government from the people.  No tangible product is given in exchange for the cost of the lottery ticket.....it is strictly the possibility of a win that is being sold.  A losing ticket (which just very slightly outnumber the winning tickets) leaves the holder of that ticket without hope and without $5.  Government run gambling operations appeal mostly to those who are poor, desperate or stupid.  I recognize that there are some who spend a few dollars just to have some fun, however that is not where the bulk of the revenue comes from.

It is an insidious tax because it is regressive in its application.  It disproportionately affects those who can afford it the least.  It is particularly insidious because it is a form of taxation that generates less anger.  There were protests in the streets when the GST was introduced and more when the HST came in.  Both of these were measures that were more efficient and progressive in their application than a lottery.  Obviously income taxes are also unpopular and more progressive in application.  Yet lotteries are often greeted with cheers and long lineups.

I know that other jurisdictions are becoming more permissive.  However, this is a moral issue.  If gambling is such a vice that it ought to be banned, then the government shouldn't be running it as a monopoly. It is harmful and dumb.  Simply because other places exploit the poor and hopeless doesn't mean that we should act like lemmings and do the same thing.  By that rationale we should legalize a host of more obviously offensive activities such that dollars aren't flowing to some far away places where anything goes.

Say no to more gambling.