FALLACY OF LOTTERIES AS A MEANS OF REVENUE.
We are indebted for the following exposition to our moral friend, Capt. John Maginn, of New York city.
"Although they may produce, by the various deceptive allurements which they hold forth, a temporary influx into the treasury of the state, yet the prostration of industry, the formation of idle habits, intemperance and various other vices, have invariably been the consequences wherever they have been introduced. No farther evidence of this position is requisite than the fact that in England, where many of the common necessaries of life are heavily taxed, it has been satisfactorily ascertained from observation, that for several days preceding the drawing of a lottery, the consumption of such articles was very materially diminished. It is moreover equally true, that a very small proportion of the tax actually paid, through the purchase of lottery tickets, is available to the state: by far the greater part being absorbed in the expenses, profits, &c., of managers and venders."
INSURING NUMBERS, OR POLICY DEALING.
As the system of insuring numbers is at present practised to a fearful extent in this city, and as its votaries are mostly the ignorant and unthinking portion of the community, we proceed to give a plain matter-of-fact investigation of the chances.
There being on the day of drawing a certain number of tickets in the wheel, out of which a particular number of them are to be drawn, it follows that there are so many chances to one against a given number being drawn as the number which are to be drawn are contained in the entire number of tickets in the wheel. To illustrate this practically, suppose you would insure the payment of $100 upon the event of a certain number being drawn from the lottery wheel to-day; suppose it is a 78 number lottery, and that 12 ballots are to be drawn; the chance then is evidently 78/12, or 6.5 to 1 that you lose: accordingly, in order to make the chances equal, you must pay 100/6.5, or $15.38, for insurance: if therefore the insurer should ask $32, there would be about $16 fraud: in other words, you would have to contend against about 100 per cent. The only inducement for the insurer to pursue this vile practice, in defiance of constitutions and laws, is a liberal per centage. This varies from 30 to 70, and even 125 per cent. Under circumstances like these, when the chances of gain are obviously so remote, it would seem incredible that any one endowed with even ordinary sagacity could be so deluded—so desperate—as to adventure; though, sad to relate, hundreds and hundreds in this city daily spend their little all in effecting insurance on numbers, and that, too, at the sacrifice of the common necessaries of life.
Another system of insurance, which we will proceed to analyze, is effected by what is termed a station number. The adventurer selects a number, and declares that it will come out the first or second drawn, or in some other place, for which he pays six cents, and if the number is drawn in the order indicated, he is to receive $2.50. To illustrate this, suppose you select a certain number, which you declare will be the third drawn; suppose also that it is a 78 number lottery, and that there are 12 drawn ballots. In this case there are evidently 78/12 = 6.5 chances to 1 against the selected number being drawn. It is also plain that should it be a drawn number, there are 12 chances to 1 against it being drawn in any particular order; wherefore it follows, that there are 6.5x12 = 78 chances to 1 against the selected number being the third or any other particular drawn number. Accordingly, to equalize the chances, in case of winning you should receive 78x6 = $4.68; hence, under these circumstances the insurer gains $2.18, which is nearly 100 per cent. Again, suppose it is a 98 number lottery, and that you pay 25 cents: here we have 98x25 = $24.50, the sum you ought to receive in case of winning, instead of which you only receive 25/6x2.5 = $10.626; hence the insurer gains $13.975, or more than 125 per cent.