US lottery hits $1.3 billion, but can it solve poverty?

The American Powerball lottery with a prize of $1.3 billion will be drawn this week. Photo / AP

An Arkansas rapper casually solved American poverty Monday with the simple post of a Facebook meme.

"Powerball 1.3 billion ÷ U.S. pop 300 million," it reads. "Everyone receives 4.33 mil. Poverty solved!!"

Alas: Not really! As smug gentlemen and scholars have pointed out across the Internet, $1.3 billion divided by 300 million is actually a paltry $4.33. (Also, not to nitpick here, but the U.S. population was 308.7 million as of the 2010 census - and only 234.6 million, if you exclude children under age 18.)

So: Why have 1.3 million people reshared the meme on Facebook, and why have hundreds of thousands liked it? Some are doubtlessly mocking the meme's bad math - but others, I suspect, agree strongly with the general philosophy of Philipe Andolini, the woman to whom it's credited.

"Her math was incorrect but I get it," wrote Livesosa, the rapper whose post made the meme go viral. "Point she was attempting to make it simple. There's enough money to feed the people."

In other words, this is a meme less about Powerball and more about distribution: How is it - Andolini's presumably arguing - that one person can, in a stroke of unthinkable fortune, win $1.3 billion ... when other people have next to nothing? Isn't there some way to distribute Powerball's proceeds a little more equitably?

While her method and math are undeniably wrong, reforms to state lotto revenue distribution make lots of sense.

This is, of course, not a policy or economics blog, so we won't delve into the political aspects of that question. But we can present some good news, for Andolini and others: namely, that Powerball does sort of redistribute money back to "the people" ... albeit not in the form of 300 million personal checks, and not in any form even approaching perfectly equitable. (Case in point: Low-income people are the biggest players of the lotto, leading many economists to argue that it's a "regressive tax" on the poor.)

Powerball is run by the Multi-State Lottery Association, a nonprofit based in Iowa, that basically operates several monster games across 36 states and D.C. When you buy a Powerball ticket, roughly 50 to 65 per cent of your $2 - depending where you are - goes to the pot of prize money. A small portion, less than a dime, goes to administering the lottery. Something like 12 or 14 cents also goes to the retailer that sold the ticket.

But the rest? That goes straight back to the state where you bought your ticket, and your state government decides what to do with it. This varies wildly by state, of course, but the MUSL tracks how much lottery money has, cumulatively, gone to different causes in different states.

In Arizona, for instance, some $625 million has gone to local transportation funds since 1982. In Indiana, $637 million has gone to teachers' retirement; in Washington state, the lottery has helped build Qwest Field and the Seattle Mariners' stadium.

At its heart, Antolini's meme seems to argue that more Powerball money should go to programs that directly address and alleviate poverty - things like literacy and early childhood reading programs (to which Kentucky's devoted $30 million) or meals and transportation for low-income seniors (as in Pennsylvania, nearly $25 billion.) Her meme argues that the Powerball pot should be spent more responsibly, not less. And while her method and math are undeniably wrong, reforms to state lotto revenue distribution make lots of sense.

Admittedly, that doesn't read quite as well as a Facebook meme.