Making Instant Millionaires

More than 8 million players held 49 million $1 tickets in New York's 1984 Lotto, then — until eclipsed by Illinois — the richest-in-history state lottery. The pot had sweetened to a total of $22.1 million. Under the ground rules, the money might be claimed by a single lucky contestant or it might be divided between an unlimited number of winners. Everything depended upon the way the numbers fell — if, indeed, they fell at all — and on how many people had purchased those winning numbers.

   New Yorkers from all walks of life clamored to get in on the action. People who had never gambled before put a dollar bill on the line — or $10 or $100 or more. A promotional pamphlet urged multiple ticket purchases with its taunting, "The more you bet, the bigger your chances of winning!"

   No one on the Lottery Board's advertising staff pressed, of course, the equally obvious truth that "the more you bet, the greater your chances of losing." Nor did anyone mention the disturbing fact that state lotteries

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offer incredibly lousy odds, in spite of the hype that makes them popular pastimes in nearly half the states in our nation.

A Strange Form of Hysteria

   Let's go back, however, to the first week of May 1984 — a week that made history for New York's lottery program. One TV anchorman described public response to the $22-million pot as "a strange form of citizen's hysteria."

   For four straight weeks, no one had held a winning New York Lotto number. When that happens, the prize builds accordingly. The New York pot was $2 million on the first drawing, then $6 million on the second. It escalated to $10 million on the third, and with public frenzy rising to new heights reached an unprecedented $18.5 million on the fourth. By the historical and hysterical weekend in the spring of 1984, the pot had swelled past the $22-million mark.

   Lotto Fever! shouted inch-and-a-half front-page headlines in the New York Daily News. Pumped-up participants endured hot sun on Friday and chilling rain on Saturday to stand in line for Lotto tickets. Hoards of New Yorkers inched their way along the sidewalks in queues often wrapping completely around the block. Savings accounts and cookie jars were emptied to provide money for wagering. Lotto sales set new records that weekend from one end of the Empire State to the other.

   Few, if any, participants complained about the uncooperative weather. Eager investors waited up to four hours, risking sunburn one day and pneumonia the next,

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to purchase lottery tickets they hoped would make them instant multimillionaires.

The Slimmest of Chances

   The chances of winning that fabulous Lotto pot were considerably slimmer than most of the participants realized. What they had to do to win, when the drawing took place that Sunday on the sixty-fifth floor of the World Trade Center, was to pick six numbers between one and 44 in the exact order they would fall. This ordered series of figures is called a "permutation of numbers" — somewhat more complicated than a simple combination. We call it a "combination" when the order in which the numbers turn up is of no importance: it is a "permutation" when each number must fall in the order the numbers are called.

   A permutation makes the odds against winning considerably greater than overwhelming. We are dealing here with 44 to the sixth power (446). A mathematics professor will explain that you take 44 as a factor and multiply it by itself five times. You might try that multiplication exercise the next time you are tempted to purchase a Lotto ticket — or if you are hooked already.

   The Mathematics Department at Miami's Barry University says the odds against winning with any single lottery ticket are 7.25 billion to one. Mathematicians with only eight-digit calculators throw up their hands and suggest it doesn't make much difference. "Just say the odds are astronomical — something close to the national debt," one advised me after exhausting the capacity of his hand-cranked adding machine.

   If a player does beat those odds and, if no one else picks

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his winning permutation, he can claim the prize money, minus federal and state taxes, all for himself — no matter how many millions are in the pot. If a dozen, 100 or more happen to choose his number, he divides the winnings evenly with all the others. Certainly these complications did not discourage multitudes of housewives, taxi drivers, students, clergymen, clerks, laborers, retirees, doctors, bankers — even the unemployed — from bucking the odds in New York's big lottery weekend extravaganza.

A Hot Potato for Evangelicals

   The gambling issue suddenly became a hot potato in the state's evangelical churches as hoards of believers broke traditional antigambling ranks and lined up at the Lotto windows. Some explained they would scrupulously tithe their winnings, so as to give God — who owns all silver and gold (see 1 Kings 20:3) along with "the cattle upon a thousand hills" (Psalm 50:10) — "His share." As did others, they came in waves to the ticket vendors to risk whatever money they could scrape together, afford it or not, on the outside possibility they might hit the elusive permutation of numbers and walk away with financial independence for life. Who needs God, some might reason, after that?

   On that fateful day in May, the numbers that fell in New York were 36-22-31-3-9-38. Four people held tickets showing the exact winning sequence: a housewife, a machinist, a manicurist and a hospital housekeeper.1 Their pictures appeared on front pages across the nation.

   But exactly 8,137,453 other people with 49,324,868 losing

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$1 stubs — plus multiplied millions of others who were disappointed in the previous drawings that failed to pay off — did not get their pictures in the paper. They were the donors. The $22-million pot of gold divided up by the winners, plus another $27 million or so that went into the state treasury or was paid out for operating expenses, came directly out of their pockets. Some lottery enthusiasts may find this truth elusive, but, as a result of the lottery, these sums of money were not available to the state economy through normal business channels.

   Each winner eventually will receive a total of $5,524,995, payable in annual stipends of $263,095 over a period of 21 years, minus a substantial tax bite that always comes off the top. this method of payment, incidentally, is not the same thing as actually winning $5.5 million up front. The 21-year payoff is a clever device that provides a sizeable fiscal advantage for the state. Given the interest earned on all that money over the payoff period, something like $10 million up front from the lottery treasury guarantees the $22.1 million payoff.

   Each of those four New Yorkers, however, has indeed been made rich beyond his or her craziest hallucinations. Promptly resigning from her job as a housekeeper at Benedictine Hospital in Kingston, 64-year-old Weonta Fitzgerald summed it all up with this simple commentary: "I was broke; now I am rich!" By almost any standards, rich is an appropriate word for a person catapulted so suddenly into that formidable tax bracket.

   Thinking Christians, however will be concerned that a lot of people, believers included, changed their value systems on that memorable weekend. Millions of New Yorkers

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and other pot-of-gold seekers who drove across state lines from neighboring areas to join the fun, were converted with a passion to the thrill of suspense and expectation. The bigger the pot grew and the more it was publicized, the more dollars rich and poor citizens alike pumped into the system. On the day before the drawing, 2300 sales locations across the state reported tickets were being bought at the feverish rate of 17,000 each minute!

   That means more than $1 million each hour was spilling out of — not into — New York's economy. Neither product nor service was provided the customer in return for his cash. The final total wagered approached the $50 million mark.

Where the Money Goes

   Public records tell us how that money is distributed:

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   On the momentous weekend in May, New York's treasury was fattened by $20,900,000. To the average family-oriented economist that sounds like megabucks, but to a state treasury it is more like the proverbial drop in a bucket. From that $49-million total handle, by the way, administrative expenses and commissions for ticket vendors gobbled up $6 million.

Where the Money Comes From

   State lotteries have no way of manufacturing money for the special purpose of making those monstrous payouts. Money is not a natural resource to be mined from the earth, drawn from the air or taken from the sea. Money is a medium of exchange — a measure of wealth, assets or value. There is just so much of it around at any given time. The person who has money got it by fair means or foul and with or without value received from someone else.

   Citizens who buy lottery tickets pay their money and take their chance. That chance — the possibility of winning and the probability of losing — is their value received. The weekly bet, for some, resembles an act of worship. The lottery state gets those dollars from people who step forward reverently to pay weekly tribute to the goddess of good fortune. Her smile, as it turns out, is reserved for a very favored few.

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   Psychologists who are concerned about the rapidly increasing number of compulsive gamblers in the United States suggest that state lotteries may be generating their own unique brand of addicted high rollers who bet hundreds each week in an irrational and all-consuming search for instant riches. The results often are devastating for families who depend upon these addicts for support.

The Headline Makers

   State lotteries develop their own following of unswerving loyalists, and with every big payoff one of those followers becomes a headline maker. Take Mike Wittkowski, for instance, the Illinois Lotto's famous "$40-million man." Mike worked a press for Deluxe Check Printers in Des Plaines before he returned on Sunday afternoon from a week's vacation in Wisconsin to find his life was changed forever.5 He learned he had beaten the staggering odds Saturday night and landed what still endures as the biggest single-person lottery prize in American history. Mike will have no further use now for that $20,000-a-year job as a check printer. He might, in fact, buy the company. Wittowski will receive $2 million each year from a 20-year annuity purchased by lottery officials.

   Mike is one of those loyal lottery followers. Since he never missed buying tickets, come what may, and since the prize was the biggest in history, Mike instructed his father, Frank, to purchase the ticket for him while he was on vacation. "Put the money on 2-3-10-26-30-43," he said. Fortunately for both of them, Frank stopped by their friendly neighborhood Blatts Drug Store on Chicago's

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northwest side and precisely followed Mike's orders.

   Not all such lottery loyalists are to be envied, however. Anna May Kelly, of Pittsburgh, Pennsylvania, got her picture circulated by United Press International because she faithfully played the same six Lotto numbers every Tuesday and Friday for two full years. But that loyalty, as it turned out, was not what won her momentary national attention. Fame came her way on the Friday she absent-mindedly forgot to buy her regular tickets.

   You guessed it. That is the day her numbers fell, paying more than a million dollars — to someone else. How would you compute the odds against something like that? Miami Herald humorist Jay Maeder ran her picture in his column, showing Anna May displaying a handful of no-win tickets dutifully purchased and faithfully preserved through the years. The picture doubtless was furnished by the sly Pennsylvania lottery people who market the program, and Maeder got the message. Under Anna May's picture he commented: "Always remember, young children, someday you might win the Lotto yourself, and it is very important that you continue to gamble away all your money no matter how dark things look."6

He Gave His Winnings Away

   Then there is Harold Collins of Peoria, Illinois — a $350-a-week engine repairman at the Caterpillar Tractor Company in nearby Pekin — who made headlines twice as a lottery enthusiast. In August 1983, he beat the Illinois lottery for $2.3 million on a $1 investment — this, too, on a 20-year payoff plan. That event turned him into

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another celebrated winner and installed him in America's lottery legend book.

   But nine months later, Collins — who lives alone in a small apartment — was back in the news again. This time it was because he gave his winnings away — every last dollar of it. Why? "I like to work. I like the way I live. I like to watch sports on TV," he told the Associated Press in a telephone interview. "What could I have possibly done with almost two and half million? I don't need it. I don't do any running around any more, so I got no use for the lottery money."7

   Because Collins had no use for the money, when his first annual check for $115,276 arrived in the mail early in 1984, he signed it over to Kathy,8 a happily married South Florida housewife, whom he describes both as "a lady friend"9 and as "sort of my adopted daughter."10 Kathy did have use for the money.

   Describing their relationship as "kind of complicated," Collins stated that he wed his "adopted daughter" in a marriage of convenience in 1972 when she was 21 and he was 43. But, he added, they never lived together and were divorced three years later.

   Oddly, however, Kathy, in an anonymous appearance on NBC's "Today" show, insisted that she and her Peoria philanthropist were never married, that he "has just been like one of the family" for years and that he was simply repaying her for handling his finances ever since she was a teenager. Kathy's husband chose not to comment on the Collins connection.

   "I myself don't believe in lotteries," Kathy volunteered to Bryant Gumbel, the "Today" show host.

   "Well, if Mr. Collins doesn't want the money, why does he buy lottery tickets?" Gumbel asked.

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   "Because he's a gambler," Kathy replied. "Collins will gamble on anything."11

   Her analysis of Collins' character appears accurate. Collins has said he will keep purchasing lottery tickets each week from the same Pekin food store. "And, I'm going to win her again," he announced confidently in a phone interview.

   Would he keep the money if he hit it rich again?

   "I can't rightly answer that," he said. "No one knows."

   Spoken in the true spirit of a dedicated gambler!

   But, in view of the almost incalculable odds that Collins and other lottery players face, we might consider "What if you win again" a rhetorical question. Lotteries don't work the way marble shoot-outs or backroom poker games work. In those, the odds — give or take a little, depending on the skills required — presumably are even.

   Illinois operates its lottery by the formula common to most states that have legalized lotteries to shore up sagging revenues. Only $45 or so of every $100 generated through Lotto sales is designated as prize money. The rest goes to costs and government coffers. Then there are those odds against getting the right permutation of six pairs of numbers — something like 7 billion to one.

   So don't count on it, Harold Collins. The odds against your winning again probably compare with the number of grains of sand on the beach at Atlantic City or the number of stars over Las Vegas on a clear winter's night!

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Points to Ponder

1. Is it true that, in a state lottery, "the more you bet, the bigger your chances of winning"? Might you win more if you bet more? How about your chances of losing? Do you feel a state is keeping or breaking faith with its citizens when it urges them to place bets against overwhelming odds?

2. If the odds of 7 billion to one against you on a $1 bet are reduced to 700 million to one against you on a "$10 bet, to 70 million to one against you on a $100 bet and to only 7 million to one against you on a $1000 bet, which bet makes the most sense?

3. Given God's sovereignty and omnipotence, how do you suppose He would respond to a promise to tithe winnings made by someone praying his number will fall in a state lottery?

4. Where does the money come from that is offered in state lottery prizes? When someone wins, who loses? Is a significant part of the money wagered kept out of normal buying/selling circulation, thus harming the economy in the long run?

5. As a citizen and taxpayer, do you accept without question the idea that we must continue to find new ways to get money to pay the ever-increasing cost of government? Why is it increasingly difficult to get that money by increasing our tax load? Why is it that the possibility of winning, even though against incredible odds, can motivate people to donate money to government even when they are unwilling to pay equitably assessed taxes?

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Notes

1. Time, May 28, 1984, p. 42

2. New York State Lottery Commission, February 20, 1985.

3. Ibid.

4. Ibid.

5. Chicago Tribune, June 12, 1984.

6. Miami Herald, May 23, 1984, p. 2.

7. Miami Herald, May 23, 1984.

8. Not her true identity.

9. Miami News, May 23, 1984.

10. Ibid.

11. "Today," NBC, May 29, 1984.

Chapter Five  ||  Table of Contents