Winners of the Lottery Can Be Losers Too
MIKE PESCA, host:
This is TALK OF THE NATION. I'm Mike Pesca in Washington.
And congratulations, you've just won the lottery. Or is it condolences, you've won the lottery? Every year, roughly half of all Americans play. The word for most of them is losers. No judgment here, they just wind up losing more money than they win, if they win at all. But even the winners find that easy street is paved for a lot of potholes like greedy family members, unrealistic expectation and load of self-doubt.
Enter the lump sum salesman. He'll buy your lottery winnings from you for a current cents on future dollars. Lotteries are big business. You can even buy a $50 scratch-off card in a few states. Illinois is selling its state lottery. It could fetch $10 billion.
Later on in the program, we'll be looking at strife in Kenya with a man who runs an orphanage just north of Nairobi from his home in Potomac, Maryland.
But first, inside the life of the lottery. Have you ever won the lottery? Do you play? Why? Give us a call. Our number here - or our Powerball numbers are 800-989-8255, with a supplementary number of four. Our e-mail address is email@example.com. And you could comment on our blog at npr.org/blogofthenation.
Joining me in Studio 3A is Edward Ugel. He worked with lottery winners in the lump sum industry for years. He's just written a book about it titled "Money for Nothing: One Man's Journey Through the Dark Side of Lottery Millions." Thanks for coming in today, Ed.
Mr. EDWARD UGEL (Author, "Money for Nothing: One Man's Journey Through the Dark Side of Lottery Millions"): Pleasure, Mike. Thanks for having me.
PESCA: Ed, start us off in the home of a winner. I'll ask you to start with a woman you call Sally(ph). You walk into her home in Dallas. You can't help but noticing there are a couple of horses in the front yard, and the horses look pretty emaciated. What's going on there?
Mr. UGEL: Winning the lottery does not make you a rodeo rider, that's for sure. You know, lottery winners come in all different shapes and sizes. But one thing that's sure is that, you know, they tend to have some - at least once they win, some pretty extravagant ideas on fashion and design and home decorating, you know, this house and not to (unintelligible) the many houses that you end up in as a traveling lump sum salesman, a title my parents were very proud of. You know, they're - gold is a predominant theme. You see a lot of gold. It looks like Donald Trump's funeral home.
And, you know, everything's new, obviously. You know, one of the things that I've said about winners in the past, sort of the nouveaux riche. So I don't think there's a thing in their house other than the winners that are older than the day they won - something that I can relate to. But, you know, looking around the house you're going to see, more than anything, two things. You're going to see brand-new appliances and equipment and a lot of family and friends hanging around just seeing what's going on.
PESCA: And the horses are not fed.
Mr. UGEL: The horses are not fed.
PESCA: And this wasn't even - this wasn't on a ranch. This was like actually in a Dallas house.
Mr. UGEL: It's like a suburb. I mean…
Mr. UGEL: …it's a, yeah, a place where, I guess, it's not that uncommon to have horses, but at the same time, we're not talking about a dude ranch here. We're talking about, you know, a big beautiful front yard and, you know, two horses that were looking like they'll hop a bus if they were given the chance.
PESCA: Now, aside from questions of taste, okay, the gilded look and lamet jumpsuits aren't your taste, is she spending beyond her means? Is that normal for a lottery - recent lottery winner?
Mr. UGEL: Well, it is, especially most lottery winners who won prior to the year 2000. Virtually, all of them had to take their prize in an annuity rather than in a lump sum. And so they're dolled out their winnings over a period of 20 - possibly 25, 26 years. And so someone who wins $1 million in the lottery is really only getting, after taxes, you know, about $35,000 a year. Even someone who wins $10 million is really - is just getting $500,000 a year and that's before taxes. And so they're probably looking at close to $350,000.
And so they really start to live beyond their means, especially annuitized lottery winners, almost from day one. You know, you hear stories all the time. One of the first winners I ever heard of, a very infamous lottery winner named Bud Post who is now dead but won the lottery in Pennsylvania. And I think the mid or early 80s, three weeks after he won, hit the lottery where he was getting $500,000 a year, he spent his half million.
And three months after the day he won, he was in debt for a half million dollars. And so it just you go from nothing into something and unless you're very savvy about the way you go into that process and you surround yourself with the right types of advisers, you know, it's a long shot out that you're going to get out of it without knocking out the few stupid doors.
PESCA: Now, you hear - you'd say to yourself or your relative, long-lost relative hears that you won $2 million and they see in their eyes the dollar signs that add up to $2 million. What they don't see is you've really just increased your salary by what does that work out to, like $70,000 a year?
Mr. UGEL: It's almost exactly right.
PESCA: Seventy thousand a year. Now, if you heard that a relative had a job for $70,000, you wouldn't think of hitting that relative off for a lot of money, in most cases. But when you hear $2 million, it's an incentive and an enticement.
Mr. UGEL: Well, Mike, you're absolutely right. And that almost goes directly to the core of the issue. You know, that starts on the day they win because when somebody wins the lottery, the lottery department doesn't say, hey, guess what, Mike Pesca is our new winner, he's getting $70,000 a year, isn't that great? You know, what they say is he's a $2 million winner. Don't you want to be a millionaire like Mike? What kind of cars you're going to buy? Where is he going to park his boat? How many horses he can have in his front yard?
PESCA: So for P.R. purposes, it's totally in the lottery's interest not to even discuss that fact that they payments are strung out like they are.
Mr. UGEL: Absolutely. As a matter of fact, the whole reason that lotteries were paid out over time in the first place was because of the marketing and publicity purposes and benefit of having it done like that.
PESCA: How much does it actually cost the state to pay out $2 million if they're really only paying out 70 grand a year?
Mr. UGEL: Well, there are several different ways that the lotteries can go ahead and make the investment necessary to pay out the $2 million. They - regardless of the backend financial mechanism, they buy treasury strips or they go in and just buy a straight annuity. No - not too different than if you or I went into any bank in the country and said, I want to pay - I want to buy an annuity that over the course of 20 years, is going to pay me X dollars a year and equal $2 million.
Mr. UGEL: And they would say, okay, well, that's going to cost you, you know, this much upfront. And typically, you know, someone won $2 million, it's likely that the lottery's investment is going to be somewhere close to $1 million. And over time, that $1 million will stretch out to $2 million.
PESCA: And the difference is, if you or I did it as a private citizens, there's no way we can market it as a lottery because it would be illegal. But also, I get the feeling that people would say, hey, you're ripping me off. It's not really $2 million. Somehow, with the state advertising budget behind it, it - that fact is lost on the players.
Mr. UGEL: Well, not only is it loss on the players, but, you know, now, as a direct result of the lump sum industry, which many people raise an eyebrow out - and for some good reasons and some not so good - but the lotteries themselves now, do, of course, offer the lump sum option to the winners. And what - I think there's over 80, if not 85, percent of new winners take the lump sum option. But that - the cat is now out of the bag as far as $2 million really being just $1 million.
One of the things that that did for the lump some industry when the lotteries themselves started offering that, of course, it really hurt business, but it did give credit to the fact that the lotteries or the lump sum industry wasn't ripping anybody off.
PESCA: Well, you guys have credibility. Because people say, oh, these guys aren't fly-by-night - they may be. But they say it's just like what the state is offering me - a payment upfront.
Mr. UGEL: Right.
PESCA: In general, should you take the state's payment upfront?
Mr. UGEL: Absolutely.
Mr. UGEL: You know, one of the reasons, as odd of a business as this was than I was in, if I won the lottery today, if you did, if my grandmother did or my wife did, God willing, anyone of those could, the first thing that I would tell them to do is to take the lump sum. You know, the problem isn't with the lump sum. The lump sum, in my opinion, is the absolute right way to go.
Mr. UGEL: You know, the problem is the people that you have to sell it to in the middle and you make sure that you get the best deal possible.
PESCA: Take the lump sum from the government.
Mr. UGEL: Take the lump sum from the government…
Mr. UGEL: …if you can, and take the lump sum from the secondary market. Just be savvy as hell about how you're doing that. And make sure you put yourself with advisers and people that are a lot more intelligent than you are who are going to tell you how to negotiate and cut this deal.
PESCA: Okay. Well, speaking of intelligent people playing the lottery. Jim(ph) from Kalamazoo.
JIM (Caller): Hey, hi. How are you?
PESCA: Tell me your story and your relationship to the lottery.
JIM: Well, I am a lottery player. I just wanted to say that my wife is a statistician. And we discuss the lottery all the time as well, as with all of our friends with her. And we still play the lottery, although, as - if the odds are 350 to one, we are, in fact, one. So…
(Soundbite of laughter)
PESCA: I thought I was one.
JIM: So I - if anyone should know better, it should be us. But we still do it because, hey, why not, it's the chance. A $1 ticket, why not?
PESCA: What's your weekly or monthly outlay?
JIM: Say that again?
PESCA: How much do you…
JIM: Oh, not very much at all. At most, five bucks.
PESCA: Mm-hmm. And have you ever won anything?
JIM: On scratch, I think the most we've ever won was about $15.
PESCA: Uh-huh. And that hooked you in for the next 150 worth of tickets. Yeah.
JIM: Exactly. Yeah, sure, that's right. That 15 went right back to them.
PESCA: Well, thanks for the call, Jim.
JIM: Hey, thank you. Bye-bye.
PESCA: Sure, plus there's carpal tunnel syndrome of all that scratching.
Mr. UGEL: Yeah, that's right.
PESCA: But as - Jim, of the winners, were the winners these occasional players or did most of the most winners you deal with, were they heavy-duty players?
Mr. UGEL: Well, the majority, of course, are heavy-duty players. I mean, logic would tell you that so. At the same time, I know several people including, as a matter of fact, someone that I write about in the book who, the first time they ever bought a lottery ticket, they won tens of millions of dollars. The first dollar they ever spent that will make you rip your hair out of if you really think about it. And especially the people that are longtime players, you know, it makes them - you taste bile to even consider the fact.
But yeah, you know. But at the same time, some people, for example, there's another winner who I know quite well who won the lottery scratch. He was a scratch millionaire twice, actually won twice. And as astounding as that sounds and you say yourself, well, what are the odds. Let me help narrow down the odd for you by telling you that every morning, this winner goes out and buys 1,000 scratch lottery tickets.
So if you're spending $1,000 a day on scratchers, you're pretty much helping your odds a lot. Now, it's still pretty wild that this person has won a million dollars plus two times. However, buying a thousand dollars a day in scratch lottery tickets is definitely going to put the odds in your favor, at least more than yours than mine.
PESCA: Are the scratch tickets much worse odds than the numbers, the lotto and the Powerball odds?
Mr. UGEL: I don't think so. As a matter of fact, I think the odds of winning something with a scratcher, of course, is much greater than we think.
PESCA: Oh, yeah. Like a free ticket.
Mr. UGEL: Exactly. But…
PESCA: That eventually leads to nothing.
Mr. UGEL: But at the same time, odds are odds.
Mr. UGEL: And so, you know, the odds of winning the jackpots, I'm sure, are equally as high. You know, the odds are very good across the board.
PESCA: No. Do states have it so that the odds can't dip beyond a certain point to keep it fair enough for the player?
Mr. UGEL: I think absolutely. And I think, you know, the states - the thing that's so interesting about the state lotteries is that they - lotteries for the most part can play it straight. You know, lotteries don't have to cheat you. They don't have to pretend that there's a winner out there when there really isn't. You know, playing it on the straight and narrow, there's plenty of money to be made.
So, yeah, if they say there's a winner in Poughkeepsie, you know what, there's a winner in Poughkeepsie. If they say that there's a million dollar scratcher out there, there still is. There are people coming in, you know, this is a - I think the lottery last year made close to - you know, lotteries across the nation made $60 billion. There's plenty to make just doing it right.
PESCA: Yeah. And is there a best way if - is there a best way to win the lottery other than you say take the lump sum? Or you think…
Mr. UGEL: Work in the lump sum industry, I think.
PESCA: Yeah, that's the way to win. But I mean, is - I guess it's that the guy who is financially savvy in all parts of his life probably will be able to apply that to lottery, but the rub is that guy is not playing in the first place.
Mr. UGEL: No, that guy is not playing. I mean, you know, there's - you know, by the way, I'll tell you, especially now that, you know, I have a book out on the market and my book is listed on Amazon with other lottery books.
Mr. UGEL: These lottery books sell like hotcakes - how to win the lottery?, guarantee the win - sell like hotcakes, makes me want to die.
PESCA: How to win the lottery, subtitle: never pick eight.
Mr. UGEL: Right.
PESCA: We're talking with Ed Ugel about his book "Money for Nothing." It's about lotteries and the lump sum industry. And we're taking your calls at 1-800-989-8255. And also send us an e-mail. The address is firstname.lastname@example.org.
I'm Mike Pesca. It's TALK OF THE NATION from NPR News.
(Soundbite of music)
PESCA: This is TALK OF THE NATION. I'm Mike Pesca in Washington.
We're talking about lotteries this hour. In a moment, we'll get a look inside the lottery industry.
But first, my guest is Ed Ugel. He's got a look inside the lump sum industry, which pays lottery winners money on future earnings. His book is called "Money for Nothing: One Man's Journey Through the Dark Side of Lottery Millions."
If you're a lottery winner or a loser - probably more of the latter - you're invited to join the discussion. Give us a call at 800-989-8255. Our e-mail address is email@example.com. And check out our blog at npr.org/blogofthenation.
And before we go to our call, a correction. I referenced that the Illinois State lottery was thinking of leasing itself, could get $10 billion. That plan was rejected. Other states have the lease of the lottery to private corporations.
Let's see if we could get John(ph) from Cleveland, Ohio, to join us. Hi, John.
JOHN (Caller): Hello.
PESCA: How are you?
PESCA: So what's your lottery story?
JOHN: I hit for - hit on a half million and quit work and things are just fine.
PESCA: How did you take your payment? Did you space out?
PESCA: You took a lump sum.
JOHN: Yes, ma'am. Yes, sir.
PESCA: How dare you, sir? And how did you come to that decision?
JOHN: I consulted - the first thing I did is I consulted, you know, a number of lawyers and bank people and I interviewed them and then talked to an accountant.
PESCA: And Ed, that's exactly what you said to do.
Mr. UGEL: Exactly. Not only consult the lawyers and the accountants, but also in the end, you know, take the lump sum. I imagine, John, that you have many, many fewer friends and interested parties hanging off of you than, you know, someone down the road who decided to take the annuity because you've taken the cash and in many ways, you're off the grid.
JOHN: I was also completely anonymous.
Mr. UGEL: Yeah. Which is one of the main points in my book is that if the lotteries allowed more winners to claim their prizes anonymously, you would be having a very different conversation. The fact that this guy took the cash and claimed it anonymously means night and day.
PESCA: John, these stories you always hear about long lost relatives, did that really happen to you? Did you hear from a lot…
PESCA: Because you were anonymous.
JOHN: Nope. No long lost relatives.
Mr. UGEL: Are you looking to adopt a 35-year-old guy?
JOHN: If I you 5 million, it's still the same. And yeah, there's no difference. I don't have to work.
PESCA: Now, I wanted to ask you about the anonymity. Did you - how did you know to ask for that? Or did your - did the state just say to you, hey, do you want to do press, and you said, no? Why was it even an option in your case?
JOHN: I'm sorry. I can't hear you.
PESCA: I wanted to know. Did the state give you that option upfront? Would you like to be anonymous or would you like to do some publicity? How did you know you could even be anonymous in claiming your prize?
JOHN: I have bad connection or something. Can you speak up louder or turn…
PESCA: Okay. I'll try one more time, which is how did you know that you could be anonymous in claiming your prize? How did you know you could opt for anonymity?
JOHN: I'm sorry.
PESCA: Okay. That's okay. So John, we thank you for the call. And maybe a new telecom system would be some way to spend the money. But go ahead, Ed.
Mr. UGEL: You know, I didn't tell you that I imagined that he claimed his prize anonymously through a trust in Ohio. To the best of my understanding, out of the 42 lottery states, only two allow their winners to claim their prize anonymously - Michigan, which has done so for years, and very recently Delaware. And I would tell you that the winners in Michigan long term are a lot happier as a consequence because their faces and their names and likenesses are not flashed all over the TV and Internet, et cetera.
PESCA: Fascinating. And does that mean you as the lump sum salesman can't get to those people?
Mr. UGEL: I'll put you this way; it's a heck of a lot harder. But when you got these many zeroes up for grabs and it's - and there's so many dollars up in the air, we found the way to find them. But it was heck of a lot harder in Michigan than it was everywhere else in the nation.
PESCA: Elizabeth(ph) from Bend, Oregon. Thanks for joining us, Elizabeth.
ELIZABETH (Caller): Hi. I was just going to say my husband and I are restaurant and bar owners. And this subject is a little morally conflicting for me because we, of course, are the land of video poker here in Oregon, as well as normal lottery and Scratch-it and Powerball and all that good stuff. So we, of course, make a lot of money off of it, but we also see who's in there spending their extra $10 on gambling. And it honestly seems like attacks on oftentimes on the, you know, uneducated lower-income folks.
PESCA: The people who could least afford to pay it. Is it different from just a bar industry where may be you're serving drinks to the dedicated drinker, if you will?
(Soundbite of laughter)
ELIZABETH: Absolutely, yup.
PESCA: Well, it's sadder is what you're saying.
ELIZABETH: Right, yeah. It's just interesting to see day in and day out the people forking over their well-earned, you know, money.
PESCA: How much money do you make from the lottery?
ELIZABETH: What's that?
PESCA: How much money do you make from the video terminals?
ELIZABETH: Well, we - you know, I'd have to ask my husband the exact details. But we split the winnings and I - it used to be 30 - we would keep 30 percent, the state keeps 70. But I'm not sure if those numbers are still accurate. But - and, you know, the state upkeeps the machines. They provide the machines. So to…
PESCA: What about payouts? I mean, if there is a big payout, are you on the hook?
ELIZABETH: We're on the hook for up to $2,000.
ELIZABETH: And above that, they have to go to a state lottery office, which we're in Central Oregon so they have to drive across the mountains to pick up the rest of their winnings.
PESCA: Ed Ugel, you…
ELIZABETH: But you have to have a certain amount of money on - a certain amount of cash on hand at all times.
PESCA: Ed, you're familiar with the Oregon lottery.
Mr. UGEL: Yeah. You know, I lived in Portland and actually was a bartender in Portland for many years. And so I was on both sides of this because I used to play a lot of video poker myself when I wasn't pulling bar shifts where I was watching the people play on the machines. Would you agree being an owner that there's a big difference between the traditional lottery system and these new video lottery terminals, these video poker terminals as far as how addictive they are to the citizens of the state of Oregon?
ELIZABETH: Absolutely. It's, you know, there are comparison to it similar to the crack industry in the '80s that it's just horribly addicting.
PESCA: All right. We'll thanks very much for your call, Elizabeth.
ELIZABETH: You're welcome.
PESCA: And joining us now is Rebecca Hargrove. She is the President and CEO of the Tennessee Education Lottery Corporation, and she's worked in the lottery industry for over 22 years. She joins us from a studio in Tennessee.
Thanks for joining us, Rebecca.
Ms. REBECCA HARGROVE (President and CEO, Tennessee Education Lottery Corporation): How are you today?
PESCA: We're good. We're good. Now, I couldn't help but noticing the word education is right in there in the title of the corporation that you work for, or the state fund that you work for. Tell us how much money goes to education from the lottery in Tennessee.
Ms. HARGROVE: Well, we're about three and a half years old and then that three and half years, we've raised $1 billion for the education programs that we fund.
PESCA: And a criticism of some state lotteries that claim to give a lot to education is that it just diverts state money that would have gone there anyway. Is that the case in Tennessee?
Ms. HARGROVE: Absolutely not. By constitutional amendment, when the lottery legislation and amendment passed here in Tennessee, it was mandated by law that our dollars can only go to programs that did not exist prior to the lottery. We do not fund K-12 education. We fund college scholarships, pre-kindergarten programs and after-school programs. Very similar to the Georgia lottery, which by constitutional amendment does the same thing.
PESCA: Well, you used the word…
Ms. HARGROVE: So they are not replacement dollars; they're enhancement dollars.
PESCA: And in Tennessee, are the lotteries relatively new - 3 years old?
Ms. HARGROVE: Three and a half.
PESCA: Three and a half.
Ms. HARGROVE: At the time we raise the billion dollars, we'll be 4 years old this month.
PESCA: Are more and more people playing every year?
Ms. HARGROVE: Well, our sales have increased every year. You know, some of that certainly may be, you know, an increase of population as well as additional games. As you mature in a lottery, you offer - have the opportunity to offer more games. As an example, we weren't in Powerball at startup because of the technology required to do that. We started with instant tickets and then added games slowly over time.
PESCA: And Rebecca, you have the reputation as sort of - I don't know, an Andy Grove or Bill Gates of lottery. You have a mind for thinking up games from what I understand. Take me inside the mind of a lottery thinker, the Edison of lotteries. What's the example of a kind of game that you invented that became really popular?
Ms. HARGROVE: Well, you know, there are a number of people who collaborate on anything that happens in our industry. I happened to - because I've been around so long, been one of those collaborators. I remember in Florida - and I'll talk a little bit about other winner experiences that I've had that are different than Ed's. But in Florida, we've had a $100-million jackpot and the legislature thought that that was too much money for one person and wanted us to tap jackpots that are a million dollars a piece.
Ms. HARGROVE: Well, obviously, the bigger the jackpot, more people play. So therefore, that would hurt the dollars that we were able to raise to fund education programs. So we introduced a game called Fantasy 5, which now is played a very similar game like that in almost every state in the nation.
But it was a game where you had the opportunity to win a million dollars three times a week as opposed to, you know, the hundred million that you had opportunity to win once every two years or so. But that was a game introduced in the late '80s in Florida when I was down there doing startup with the Florida lottery.
But I would like to address winners for a second, if I may.
PESCA: Please do.
Ms. HARGROVE: I have met hundreds and hundreds and hundreds of winners. And what I found is because our players come from every walk of life, our winners come from every walk of life. I've seen a silk-stocking lawyer win in Atlanta. I've seen the architect from Miami win. I had a woman who won 56 million in Florida who started a foundation for battered and abused women in Orange and Seminole counties. Actually, I had lunch with her one day and she had on jeans and was moving furniture in the foundation office. And I looked at her and said, you know, Sheila(ph), you won $56 million, why don't you hire somebody do move the furniture? Her response to me was, well, then, I wouldn't have as much money for people who really need it.
So that, you know, there are winners from all walks of life. And like the gentleman who called in from Cleveland, those don't make press stories or are maybe aren't the people that Ed's gone to do a lump sum with. There are two other points I would like to make.
PESCA: But first, let me just ask you about the winners that you come into contact with. I mean, they're certainly inspiring anecdotes, maybe even the cornerstone of marketing campaigns. But according to Independent Lottery Research, which does research and marketing for state lotteries, such players represent only 10 to 15 percent of all players but they account - meaning, the dedicated player, the player that bets over a hundred dollars a week - such players who represent only 10 to 15 percent of all players but account for 80 percent of sales. So a small percentage of players, the very dedicated players, are driving the lotteries according to this independent research firm, does that jive with your statistics?
Ms. HARGROVE: I have not seen that report. I don't know that company so I really can't address a report I've not seen. We find that the average player in Tennessee spends $3 to $5 a week. And if you look at our sales, which are roughly a billion dollars a year in a state with a population of six million people, it would be hard for that billion dollars a year to come from 10 percent of our population. That just - those numbers just don't jive.
PESCA: Let's say I'm doing the math here on my head that comes out to six million. So maybe let's call five million of people, 18 and over, divided by a billion, that means people are betting an average of 200 bucks on a lottery in Tennessee a year?
Ms. HARGROVE: I'm not sure your adult population figure is correct, but…
PESCA: It's in the neighborhood, right?
Ms. HARGROVE: Yeah, probably.
PESCA: So to an - I mean, is that good? Is that good that Tennessee residents were spending an average of $200 a year on the lottery?
Ms. HARGROVE: Well, that's certainly raises a billion dollars of the education programs that we fund and we had players win over $2 billion in winnings, so there are lots of winners.
PESCA: All right. Ed, do you want to say something?
Mr. UGEL: No. I mean, you know, Rebecca Hargrove is immensely talented. I mean, her reputation genuinely precedes her. And her job, frankly, is to make the Tennessee lottery money. And she is very good at that job and very well-compensated for it as she should be, you know. My issue isn't with Rebecca Hargrove. My issue is with - I think that, you know, if she would have worked in the private sector or she would have worked, for example, in a casino, I would worship at her feet, I think, that she's one of the most interesting sales and marketing minds in the gambling world I'd ever heard of.
What I take - what I have an issue with and what I wrote about it in the book is that because she's under the umbrella of the state itself, that whether or not it's Illinois or Georgia or Florida or now Tennessee, that there is a difference earning this money whether it's for the children, you know. We always say, oh, it's for the children, for the education. It is. And by the way, Georgia and Tennessee, both of which Mrs. Hargrove deserves immense credit for, have a tremendous reputation for really putting money towards education. But still, doing that, raising that money on the backs of their own citizens many of whom struggle with gambling and gambling addiction, in my opinion, there are cleaner ways to skin that cat.
PESCA: The one quote I have underlined in your whole book, Ed, goes right to that point. It's: I'm not implying that the world lottery carries some benevolent imagery, but the word state should.
Let's take a call. I think we have Mike(ph) from St. Louis. Go ahead, Mike.
MIKE (Caller): Hi. Yeah. I just want to address that issue myself, which is bugging for many years. I've never gambled or I'm not against gambling. I think it's fine if you want to do it. But here where you have the state selling to us and the children the idea that you should work hard to get ahead and then, turning around and sort of cover - trying to find the end to that message by saying don't work hard, just gamble here and - well, it's soliciting people to do something that everyone knows is a bad deal.
PESCA: Rebecca, would you want to address that?
Ms. HARGROVE: Well, the last Gallup poll I saw said that 76 percent of the population of America believes that lotteries are an effective way to raise needed funds. Every state that has a lottery has done so either by a vote of the people who voted that they wanted one, or passed legislation by the people's elected officials saying they want a lottery. So it's really a public policy decision that the people in each jurisdiction make. And it's the public vote that says, yes, we want a lottery and yes, we want it run by the state that has set up the industry that I participate in.
Now Mike, you said earlier that some lotteries have leased or sold their - some states have leased or sold their lotteries.
PESCA: I think Indiana did. Yeah.
Ms. HARGROVE: Well, now, there are several states that have discussed it. No one has done that yet. Indiana's discussed it, California has discussed it, Illinois has discussed it, Texas has discussed it, Vermont has, Rhode Island has, but no one has actually taken that step yet. And I think the reason that there is government control on lotteries goes back to a scandal in Louisiana in the late 1800s where lotteries were run like casinos by private enterprise without any governmental control. So, yeah. There are…
PESCA: And before - just let me gave…
Ms. HARGROVE: …histories on why things are the way they are.
PESCA: And Mike, I want to thank you for the call. Rebecca, we have to let you on a second. Here is my one question. Everyone compliments you for your mind and your marketing. One of the justifications for the lottery is let's have the state do it because people are going to do it anyway. But if we have such brilliant minds in the state doing their job, which is to say growing their base, aren't we using the state to convince people to gamble while there - they otherwise wouldn't be gambling?
Ms. HARGROVE: I'm not sure that our player is as naïve as you portray them to be. I think our players in Tennessee were either playing in Tunica right across the border from Tennessee or buying Georgia lottery tickets or Virginia lottery tickets or Kentucky lottery tickets. So - or, you know, they go up to metropolis and do riverboat gaming. If they want to play a game of chance, they would rather those dollars help educate Tennessee children rather than Georgia or Virginia or Kentucky children. And I don't think our player is that naïve to say, well, it's okay because the state does it. I think our player says it's fair.
PESCA: Got it.
Ms. HARGROVE: Because our state does it.
PESCA: And Ed, a final thought.
Mr. UGEL: Well, I think that, well, Mrs. Hargrove is correct that, of course, the lotteries were all voted in by the states. I don't think anybody voted for video poker machines or for these new NASCAR-type games that they have in the bars of Tennessee where they run every five minutes from 6 a.m. to 1 a.m. in the morning and you can win. I don't think anybody had that in mind when they pulled that lever in the ballot box.
PESCA: Well, the lottery is both a source of entertainment and an educational discussion.
So thank you, Rebecca Paul Hargrove. And thank you, Ed Ugel…
Ms. HARGROVE: Thank you.
Mr. UGEL: Thank you.
PESCA: …author for "Money for Nothing: One Man's Journey Through the Dark Side of Lottery Millions."
We'll be back in a second or two to talk about strife in Kenya.
This is TALK OF THE NATION.
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