"Or is this a standard "prohibition creates criminal opportunity" issue?"

This is exactly it. And it is not something that should be dismissed, it has pretty much been proven correct. In the US, before state run lotteries were present and popular, there were criminal run "numbers games" which were quite similar to lotteries but with much worse payout ratios and where the criminals that ran them often refused to pay for various reasons.

In the Scorcesse classic movie "Mean Streets" one of the storylines is about a kid that wins one of those numbers games but the person that runs the game refuses to pay him because he is of a mixed race.

Numbers games are very rare in the US nowadays and when present are only present in poor immigrant communities that do not know much about the state run lotteries. The state run lotteries did a pretty good job of getting rid of the numbers games and thus depriving organized crime of a source of revenue while providing better odds of success for lottery players and also taking in money for the government and thus saving taxpayer money.

The original lottery idea was also reasonably effective at keeping individual betting volumes low. They did this by making sure that each ticket was relatively cheap and required relatively large amount of work to determine the winner. Thus it was hard for someone to buy many tickets. Unfortunately, this is something that has slowly been eroding as lottery systems try to get more revenue and encourage compulsive buying.

So no I do not think state lotteries should be banned but it may be a good idea to change the rules for advertising or the games themselves to discourage individuals from blowing too much money on them.

This is a very useful perspective on the positives of lotteries. I've always found them to be bogus, borderline theft. But when you consider the fact that it mitigates--almost entirely removing--more shady versions of the game, it makes lotteries seem more like a necessary evil for the time being.

However, that's not to say that the government couldn't do a better job of educating the public on it. Lotteries are definitely aggrandized with all the bells and whistles to make people feel like they have a real shot at winning which I would argue could draw in people who wouldn't have played--lottery, numbers games, or otherwise.

Couldn’t the government do the same for other kinds of vice (drugs, prostitution)? They could permit activities to the level where you get a power law kind of trade-off between consumption and risk from consumption so as to monitor and educate participants over a long period of time (more than 80/20 for behaviour with more detrimental outcomes). You also get the benefit to study the behaviour and figure out how it works in order to have truly effective solutions through repeated experiments etc.

I'm aware of the history of "numbers games" and concede that while state-run lotteries were instrumental in their demise, I am unconvinced state-run lotteries are still the optimal way of suppressing organized crime.

Haven't law enforcement tactics particularly against organized crime improved greatly in meantime? While there are important concerns about the scope and application of these laws and regulations, it seems to me that moving around large amounts of cash without the federal government noticing has become more difficult for criminals (and non-criminals) than ever before. And might modern illegal numbers games in immigrant communities be related to notoriously poor law enforcement involvement in those communities, which allows criminal numbers games to remain relatively unmolested?

Maybe I'm wrong about all of that, but something else to consider is whether gamified savings accounts might reduce demand for illegal numbers games just as state-run lotteries do. If gamified savings accounts can suppress illegal numbers games in the same way state-run lotteries do, while at the same time inflicting less harm on economically vulnerable populations, that seems like a win-win scenario.

> In the US, before state run lotteries were present and popular, there were criminal run "numbers games" which were quite similar to lotteries but with much worse payout ratios and where the criminals that ran them often refused to pay for various reasons.

Do you have a source for that? My recollection from my own reading years ago is that the criminal numbers games tended to pay better odds than modern state-run lotteries.

Wikipedia claims 600:1 payout on 999:1 odds was typical. That's about a 60% payout; a published analysis [0] indicates that California lottery games range between under 50% (most games) to nearly 80% (the latter for high-denomination Scratchers.)

So, in general, worse than numbers games, though better if you choose the right game.

[0] https://wizardofodds.com/games/lottery/california-lottery/

You are 100% spot on. Advertising for gambling should be treated as vice advertising and heavily restricted. Like tobacco, pot, casino, horses or others.

Especially horses. Damn, those spoiled, entitled horse ladies... "I want a pony!" Yeah right.

Lotteries work like a social safety valve. They give hope to the poor that there is a chance, however small, that they will make it big and sort out their financial problems just by winning the lottery.

And so they keep working and trying and living their lives despite the fact that there is basically zero chance of ever earning enough money, because: "Someone wins the lottery every week! Next week it could be me!!".

It's interesting to note that given the oft cited statistic that lotteries are disproportionally consumed by the poor, that amount they are disporportionally consumed and how that statistic is come by might not lead to the conclusions people often jump to:

The data reveal the following general trends. First, lottery gambling extends across races, sexes, and income and education groups. Second, black respondents spend nearly twice as much on lottery tickets as do white or Hispanic respondents. The average re- ported expenditure among blacks is $200 per year ($476 among those who played the lottery last year). Black men have the highest average expenditures. Third, average annual lottery spending in dollar amounts is roughly equal across the low- est, middle, and highest income groups. This implies that on average, low–income households spend a larger percentage of their wealth on lottery tickets than other households.[1]

Those in the lowest fifth in terms of socioeconomic status (SES) had the “highest rate of lottery gambling (61%) and the highest mean level of days gambled in the past year (26.1 days).” Moreover, there were “very few observed differences in lottery gambling for those in the three upper SES groups — 42–43% gambled on the lottery and the three upper groups averaged about 10 days of gambling on the lottery in the past year.”[2]

It's clear that the poorest people may more, and it's more of their relative income, but it's not anywhere near rate for other income groups to play as well.

The real interesting take-aways I see are what you get when you look at the following two facts (shown above):

- The lowest quartile income group only plays about 50% more often than the other quartiles (~60% compared to ~40%).

- Each tertile income group spends approximately the same amount of real dollars.

With these, it starts to look a lot less like some tax on the poor and/or stupid that people like to classify it as, and more as a cultural phenomenon (or something that plays to the human psychology, since I think it's fairly common in most cultures).

It may indeed be that the lottery works as an aspirational tool, as you note. But I think it must also be working in other ways, otherwise I'm not sure why we would see such large investment from higher income groups as well.

1: https://www.ntanet.org/NTJ/58/2/ntj-v58n02p281-302-economic-...

2: https://journalistsresource.org/studies/economics/personal-f...

I think the primary issue is replacing the revenue stream the finances along with a host of other state government provided sources. Simultaneously raising taxes and banning the lottery could be a very difficult move politically.

> Or is this a standard "prohibition creates criminal opportunity" issue?

I'd say it's a bad idea because... and hear me out... people will still have lottery. I present as evidence to my argument the prohibition on drugs, sports betting and prostitution. You can add in homosexuality where it is prohibited. And this even happens in places under penalty of death.

Trying to restrict willing, consenting adults from titillating their senses in private transactions in private property... has been a spectacular failure.

I know, you probably know better for these people than they do. But we are stuck in a world with what seems like humans that enjoy (or suffer from) free will.

How many times does the social experiment of restricting these titillation have to be carried out with all it's high costs before we figure out it isn't worth it.

Why tie the two policies together? Gamified savings accounts seems like a good idea on its own.

I'm somewhat confused by the downvote. The article seemed to provide compelling evidence that lotteryesque savings accounts encourage savings, especially among populations who save the least. I'll again ask: Why would such a policy need be coupled with the removal of state lotteries? One could implement it and get benefit regardless of the traditional lottery.

I think you're right, there is no reason the two must necessarily be connected. Although I think the legalization of gamified savings accounts might provide an opportunity to ban state-run lotteries.