Regressive tax on poor
LOTTERY: 42% OF PLAYERS HAVE HOUSEHOLD INCOMES OF R5 000 OR LESS
Over 30% describe their behaviour as ‘impulsive’ in buying Lotto tickets.
More than twothirds of the people who play the lottery are poor, according to findings based on a survey conducted from November last year to February this year and which follows earlier research commissioned by the National Lotteries Commission (NLC) eight years ago.
The percentage of poor people playing the lottery has dropped since a report last year on research conducted for the NLC in 2011. That research found that more than 70% of lottery players earned R5 000 or less a month and, of those, about a third earned R1 000 or less.
The latest countrywide research, conducted by Unisa’s Bureau
of Market Research, used a random and representative sample of more than 3 000 people. It found that 42% of lottery players have household incomes of R5 000 or less a month and, of those, 6.5% have household incomes of R1 000 or less – a decrease from the earlier findings, but still a significant number of people.
Also, inflation over the eight-year period meant that the results were not strictly comparable. But even taking inflation into account, the number of low-income earners as a percentage of lottery players has declined.
Nevertheless, more than 60% of lottery players have household incomes less than R10 000 per month. Nearly 28% of the people who play the lottery are unemployed and about 29% receive social grants, the survey found.
What this means is that, in many instances, players are using money they cannot afford for a near-impossible chance at winning big. The report’s researchers even went so far as to say that poorer households “displace the bulk of their lottery expenditure from household necessities”.
After the number of balls used in the draw was increased from 49 to 52, the odds of winning the big prize rose to over 20 million to one. The odds of winning one of the smaller prizes are much better but, of course, nearly everyone who plays the lottery spends more than they win.
Asked about creating alternative ways to enhance the probability of winning, one participant suggested that the number of balls should be cut from 52 to 40, “so at least when they reduce the numbers, the odds will become better”, which would drop the odds to a bit less than one in four million.
That’s not going to happen, but even with the 49 balls that the Lotto formerly used, the odds of winning were only one in nearly 14 million. By comparison, the odds of a plane you’re on crashing are considerably higher: one in 5.3 million.
Many people who play the lottery are chasing a better life, with 74% of survey participants citing the “need for money” as their reason for playing. The most common reasons people surveyed gave for playing the lottery are to win money to “improve their standard of living” and to “alleviate high levels of unemployment”.
The research also found that more than 25% of lottery players said they spent more on playing the lottery than they had budgeted for and “could not resist the urge to play again”. Over 30% of the players described their behaviour as “impulsive” when it came to buying lottery tickets.
One in every five people admitted to experiencing disapproval from friends and family for spending too much on playing the lottery. Close to 24% of participants spend between R21 and R50 each month, while nearly a third spend between R51 and R150.
Put another way, the lottery can be categorised as a regressive tax on the poor. – Republished from GroundUp.org.za
Nearly a third spend between R51 and R150