The Ethics of Jackpots

We’ve spoken about the business aspects of gambling – and the attendant ethical questions – in this space before, and I don’t believe there has been much change since our last ethics post on the subject. Like most business ventures that have the potential to do harm to the customer when used as intended, there will always be controversy over whether our ethical responsibility as businesspeople to keep our customers free from harm or risk whenever possible overrides our ethical responsible as citizens of a free republic to respect the rights of consenting adults to do things they enjoy that are not necessarily good for them. But with the huge media storm kicked up by last week’s record-setting lottery jackpot, it seems worthwhile to take a look at some of the less common concerns associated with gambling on this scale – some of which are quite different from the issues you would encounter even in quite large private gambling operations…

To begin with, the news stories tell us that the people who bought tickets for Friday’s drawing spent in excess of $1.4 billion in their attempts to win a prize that will work out to a bit less than one-quarter of that amount. One could argue that the remaining 75% will go towards state education budgets and the profits of the stores that sold the tickets, thus improving both the economy and the state budgets for the next year. But for the most part, the states do not add the amount they receive from lottery games to their existing education budgets; they deduct the amount of the lottery income from the existing budgets and transfer those funds to other expenses. There is still a benefit to the retailers, but in many cases the share given to them by the state barely covers the cost of selling the tickets in the first place; several store owners have told me that the lottery sales are mainly useful as loss-leaders, bringing in customers who will then purchase something else. And even if both of those benefits were genuine, there still remains the issue of a nation of debtors spending $1.4 billion they don’t have on gambling…

Then there’s the issue of how winning affects the winners. Stories of people winning a small fortune in a lottery game, spending all of the money in a matter of weeks, destroying their credit and winding up much worse off than they were to begin with are common in America, and there’s some indication that winners are also targets of fraud schemes, frivolous lawsuits, and freeloading friends and relatives. Given that most of the people in this country lack the training to manage their money before they win a lottery prize, it is probably unreasonable to expect the sudden influx of millions of dollars to improve matters – and given the venal nature of humans in general, it’s probably also not realistic to expect people not to attempt to fleece anyone who has suddenly received millions of dollars and has no idea what to do with them…

Of course, all of these objections also apply to small-scale gambling operations, but most people don’t have access to other forms of gambling on every street corner (in every market, bar and convenience store) the way they do with state lottery games. It’s also very unlikely that dozens (or hundreds) of old friends, long-lost relatives and people who really WANT to be your friend will attack someone who has just won a few thousand dollars at a casino or racetrack the way they will someone who has just won $400 million in the state lottery. And regardless of the relative risks, the right of consenting adults to do as they wish with their own money remains the same in each case…

So if these massive lottery games have so little benefit, and have the potential to cause so much harm, do we as business people have an ethical responsibility to oppose or eliminate such gaming programs? Or does our obligation to allow people to live their own lives and make their own choices outweigh our responsibility to protect our customers and our fellow citizens in general?

It’s worth thinking about…