This is a cross-post from my post on the Ready to Harvest blog.
The news is out that someone has won the multi-billion Mega Millions lottery jackpot. Several others have won one or three million dollars as second place winners. Everyone has had dreams of what they would do if they suddenly were very rich- helping others, getting a nice house or vehicle, moving or enjoying vacations. It is fun to purchase a lottery ticket and –despite the odds- thinking that perhaps that winner could be you.
So what are the reasons given why a person shouldn’t be giving their money into the lottery system? Is there anything immoral about it? Why is gambling one of those things on the list that Baptist preachers have always spoken against? Let’s cover a few reasons.
- Many people don’t play to lose
Perhaps if you are in the middle class, and you go to purchase a lottery ticket, you are playing to lose. You realize that you will lose, but it’s fun to keep the dream of winning alive. You have some spare dollars, and you throw them in. It’s no surprise when the numbers don’t line up with your picks. No harm, no foul right? But the truth is, no matter how badly the odds are stacked against the lottery player, there are thousands upon thousands of players who are not playing to lose. They are putting in money they can’t afford to lose, because they want to get it back. They aren’t voluntarily giving it to the winner. The system exploits their weaknesses. You might say “but they do have a choice! They didn’t have to buy the ticket!” to that, I answer:
- The lottery preys on the addicted
Maybe you have bought a ticket only once every couple of years when the jackpot gets really high. But there are plenty of people who are caught in the lottery trap. They have already put tens of thousands or hundreds of thousands of dollars into the lottery, and they feel their only hope to win it back is to keep playing. You may say these people could quit any time, but to them, their only hope for not being foreclosed upon, the only hope for their family eating is if they buy a ticket and win big. You may say that their foolishness and addiction is not your fault – which is true. But if you win anything from the lottery, their money is in your hand. You are now responsible. You have stolen from them what they wanted to use to feed their children. They didn’t want to give it away. A lottery winner has taken -legally- what doesn’t belong to them morally.
- The lottery is a wasteful zero-sum game
The lottery system is in general, a transfer of wealth from the poor to the government, and some going back to the poor. Most of the money that goes into the lottery goes into the hands of the government. Some directly, and a large amount through taxing the winners’ winnings. Additionally, the lottery employs people to make the tickets, perform the drawings, etc. Millions of hours are spent shipping and selling the tickets. In the end, all that has happened is money has been thrown away with this administration, a bunch has gone to the government, and some has gone back to the “winners.” It is a zero-sum game. No wealth is generated. The only money that exists is that put into the pot by those buying tickets. It doesn’t produce anything, it lowers the standard of living for all involved but a very, very few. So not only is the lottery a form of legal theft and exploitation of the poor, but it is wasteful with the money that was taken through coercion.
- The lottery encourages covetousness
There’s nothing wrong with wanting something that you don’t have. Driving through a lot full of vehicles for sale and hoping to earn enough to buy one is not immoral. Wanting to get the newest phone is not immoral. Covetousness is wanting something that is not yours because it belongs to someone else – it is not for sale. A biblical example is the wife of your neighbor. There’s no legitimate way to get your neighbor’s wife, so a desire to have her is immoral.
The lottery is a deception. It promotes a desire for wealth in the individual to trick him into putting up some of his own money to gain back the large sum. Therefore, the money one is craving when they think about winning the lottery is indeed money they could possibly get legally, but not morally. The money they want is the money that belonged to the poor neighbor who was tricked and coerced into giving it up. He would not have willingly handed you that money. He only handed it in in expectation of more being handed him. Because of this, everyone who plays the lottery is coveting and desiring to get what doesn’t belong to them. It also doesn’t belong to the government. It rightfully belongs back in the hand of the person who lost it.
Now, with this in mind about the lottery, let’s ask about the stock market. Is the stock market the same as the lottery? Is it gambling?
First, let’s understand the stock market, and what it is. Imagine that your friend opens a business and asks if you would be willing to put in $10,000 to help start the business, and you can have 50% of the company. Perhaps the company will do well and you, getting a cut of the business’s profits, will make many times over what you put in. Or perhaps, the next year the company will do poorly, become insolvent, and you will lose your entire investment. Is this gambling? It clearly isn’t. If you “win” in this situation, it is not because you took something that didn’t legitimately belong to you, it is because people willingly did business with your company, and as a result, both you and they were made better off. If the company does poorly, it is not because someone has taken illegitimately what belonged to you, but because of your inability or the company’s to run the business in a profitable way. You took on a risk, just as a farmer takes a risk planting seeds when the seed could be washed away or eaten by the birds, or his plants could die from disease or drought. So the small-business investment is not gambling.
The stock market is the same as the small-business investment. But it is actually a very, very small ownership percentage in a large business. Or perhaps an investment spread out in percentages of many businesses. So when you make money in the stock market, again, it is not at anyone’s loss, but because the company did well – it served its customers. When you lose, nobody has taken from you, but the company or companies you have invested in have receded in profitability for the time being.
Notably, this is not a zero-sum game. Everyone can see gains together or see losses together. A stock market investment doing well is not contingent on your neighbor’s failure.
A small percentage of stock market activity is “short selling” which is effectively betting against success. I won’t discuss it in this article, as it isn’t part of most investor’s activity. And obviously a person can do other immoral activity in the stock market, like insider trading, or investing in immoral companies. However, as a basic principle, it is not immoral, nor is it gambling, to invest in the stock market.
Let’s quickly look at the reasons given for why the lottery is immoral and see the difference compared to the stick market.
- In the lottery, #1 was “Many people don’t play to lose.” This meant that people who nearly inevitably would lose their entire investment were only investing because they thought they would gain. To some extent the same is true in the stock market. However, the difference has multiple parts: In general, losses are temporary. The person who invests wisely and waits will see things turn around. The lottery player ends up owning nothing, but the investor owns a percentage of a company. Though the value fluctuates, they still own that percentage. Nothing has been taken from them even if the value goes down. In the lottery, the whole system is built on people losing. This is what makes gain possible. In the stock market, everyone is in the same boat within a company’s stock. All are working together and working for company gain. Good decisions and management will lead to the company increasing in value, and the reverse leads to a decrease. A gain is a positive gain for all at nobody’s expense.
- #2 was “The lottery preys on the addicted” Notably, lotteries are real entities. These are organizations built to exploit. The companies people invest in are not concerned to exploit anyone. A person who puts money in is an investor, and the company will seek to do well and reward its investor. No shiny signs are placed in poor neighborhoods or in gas stations, nothing is done to try and force a person to be an investor. Those who are poor are found to not be investing in the stock market, but typically throwing their money away into the lottery. (This can often be why they are poor)
- #3 was “The lottery is a wasteful zero-sum game.” In contrast, gains and losses in the stock market are taken together. Money is used to grow the company. Stocks grow, not because of the loss of a person, but because of free trade and willing buyers consuming what the company produces.
- #4 was “the lottery encourages covetousness.” In contrast, desire for one’s stocks to do well is not covetousness. It is not desiring something that doesn’t belong to you. It is simply desiring for one’s own interest in companies to do well. This desire is a desire that all would benefit. It is a right desire. This desire does not come with a commensurate desire that others do poorly.
In conclusion, the preacher was right all along – the lottery is immoral. Let’s not encourage the use of it. Remember, legality doesn’t imply morality. Be a wise steward and have your motives and desires in the right place.