The jaw-dropping hypocrisy of the Powerball

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Story highlights

  • Danny Cevallos: Government prohibits private gambling in which the odds are decent
  • Then the government runs its own lotteries with outrageously bad odds, he says

Danny Cevallos is a CNN legal analyst and a personal injury and criminal defense attorney practicing in Pennsylvania and the U.S. Virgin Islands. Follow him on Twitter @CevallosLaw. The opinions expressed in this commentary are solely his.

(CNN)When it comes to lotteries, the government should be ashamed of itself.

That's what I'm saying now, after the announcement that winning tickets were sold to three people who are not me. Of course, if I held the winning ticket to the Powerball, then I'd be a huge fan of lotteries, and governments, and probably everything else in the world.
Instead I'm with most of you, experiencing a national hangover — a dull throbbing angst, caused not by alcohol or drugs, but by a more corrosive sentiment: thinly-disguised envy.
    We all secretly resent those three winners of the Powerball, because we all secretly imagined what we'd do with the money if we had won.
    We have the government to thank for these aftereffects.
    The hypocrisy of state-sponsored gambling in the form of the lottery is so grand, so jaw-dropping, that we don't even notice it. The government has hidden it in plain view.

    Private poker game

    Imagine that you decide to hold a weekly poker game in your house. All players are consenting participants, and experienced players. Sorry. That's illegal. That's what happened to an exclusive house game involving celebrities and high-rollers, which eventually led to a federal indictment. The government has made clear: Private, consensual gambling is a crime, and public funds will be spent on prosecuting it..
    What about a friendly game of blackjack at your home? After all, if you follow basic blackjack strategy, the house advantage against a player using the basic strategy can be as low as 0.16%. That's about as close as you come to 50/50 gambling odds, and among the best, fairest odds you'll find in the gambling world.
    But that's illegal, too, if done in private. If a casino does it, and players and casinos both pay taxes on the game, it mysteriously and suddenly becomes legal.
    And, if you want to buy a lottery ticket? Well, head on down to your closest bodega and let your state government sell you the worst gaming odds imaginable — odds so bad that if the lotto was a game in a casino, you wouldn't dream of pushing all your chips into the center of the table.
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    In the casino, everyone knows the slots are a sucker's bet, but even the one-armed bandits are required to pay out between 80% and 100% over the life of the machine. That's a heck of a lot better than the 1 in 292.2 million odds that were your chances to win Wednesday's Powerball.

    How government justifies it

    Sure, your state government tells you it's going to a good cause, like schools or to the elderly. But how much of a difference is it really making -- since we're always complaining about the state of our schools? And does providing care for the elderly somehow justify state-sponsored vice?
    The entire reason private gambling is illegal is because the government tells us it's a scourge, an addiction, an illness. Gambling is illegal because it's immoral -- unless the government itself does it.
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    When the government gets in the gambling business, it's a different story. It's not only legal, but the government will spend money on television ads encouraging you to spend your money — or money the government has given you — on a recognized addiction, one that's illegal if anyone other than the government does it.
    Don't forget, too, when the government sponsors gambling, you have virtually no chance of winning, either. The government has the monopoly on the service. And like all monopolies, when the government has no competition, the service is lousy.

    Office pool woes

    So, no one should be surprised when lottery office pools go wrong. You should expect them to. From a lawsuit perspective, if an employee wins the lottery and there was an office pool within four floors of his cubicle, his co-workers have every incentive to fabricate a lawsuit against him.
    It's worth a shot: Even if the co-workers settle out of court for "nuisance value," they are still big winners. Nuisance value in a slip-and-fall case might be a thousand dollars. Nuisance value in a lawsuit challenging a $1.5 billion payday? A sued winner would pay a million to make it go away. Not surprisingly, lawsuits among colleagues in a lottery pool happen pretty often.
    The reality is, most of these office pool agreements are not in writing; they are oral agreements. While oral agreements can be valid, they are said to be not worth the paper they are written on; proving the terms of an oral contract can be a he-said, she-said "mishegas."
    Paradoxically, even though it's potentially the biggest financial partnership agreement these people will ever enter into, rarely is there a written agreement. There are two reasons for this. First, a dose of realism. Your pool will not win. I mean, it's theoretically possible, but it's not going to happen. So most of the office lottery pool talk is just office fun; a diversion from those miserable reports, waiting for that hour hand to inch inexorably toward quitting time.
    The second reason why office pool agreements are not in writing? A naïve, misguided sense of "office camaraderie." People think: "Steve from the accounting department is running the office pool, and we're all friends, so we trust Steve. He's cool." Steve is not cool. Think about it: The entire reason any of you, including Steve, got into the office pool was for the glimmer of hope that you might win -- and never have to see Steve or any of the other nudniks from work ever again.
    If Steve has any chance to bilk his co-workers out of a $1.5 billion payday, he's going to do it. You know it, because you would probably do it, too. You have 1.5 billion good reasons to do it. Why would you expect any sense of loyalty from your co-workers? Steve from accounting may be your friend, but if it's between you and Steve winning enough to buy a private island, Steve's loyalty is going to dissipate pretty quickly.
    Ultimately, the lottery brings out the worst in people: It foments gambling among existing addicts, and encourages nonaddicts to try out the habit. It encourages people to waste money they don't have for something they can't win. And for the citizens who do win, they can expect their family and friends to come for handouts -- or lawsuits.
    All brought to you by your government. Take their word for it: The elderly and the schools thank you.