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February 16, 2005

The National Lottery: A Tax on Stupidity.

It’s often said that the National Lottery is simply a tax on stupidity. The odds of getting the jackpot are 1 in 13.7 million or so. Very rarely is the jackpot of that size, and even when it is it is often shared. It is therefore a losing bet.

More recently  some economists have been demurring from this view, stating that the quid paid over is worthwhile given the enormity of the possible returns....in essence,not that people are too stupid to understand odds, but that even bad odds of suddenly becoming a millionaire are worth it. I happen to have a lot of sympathy for that idea as my basic worldview rests, in part, upon the idea that people do what people do because they are indeed rational beings. Certainly, the odd quid spent on a Thursday gives one a quid’s worth of pleasure in dreaming about what one would do if the numbers do come up on the Saturday.

Then I look at what the money extracted from the populace in this manner actually gets spent on. The good causes that the profits should go to, enhancing the value of the lottery by putting the loser’s money to good use in the community. The Dome pretty much destroyed the idea that it would be well spent but now we have this:

Gordon Brown has signed a letter of guarantee promising that taxpayers will fund any cost over-runs if London wins the Olympic Games, the Treasury confirmed yesterday.

That is uncontroversial....pretty much  a pre-condition of any bid is that the State will underwrite it. But:

However, he has already taken steps to ensure the risk is passed from the Treasury to London taxpayers and the National Lottery. In theory, they could be forced to cover the entire of any cost over-run as the underwriting agreement with the Government remains secret.

Yes, the likely billions of cost over runs on the Olympics (as far as I am aware there has only been one public sector engineering project which came in under time and under budget in the past 50 years. The Polaris submarines....yes, Father worked on that so, err, Mr. Worstall, would you please accept this peerage and replace Sebastian Coe?) are to be paid for by grannies gambling their occasional pound on the dreams of instant wealth. As ever with public spending, we should ask cui bono, and as ever in our over spending and over governed State, it appears that it is the poor paying for the pleasures of the middles classes and the rich.

Me? Withdraw London’s bid and let the French have them in Paris. Serve them right for being Frogs.

February 16, 2005 in Your Tax Money at Work | Permalink


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