Photograph by Jessica Darmanin
You don’t need to be a financial wizard to realize that expecting the lottery to finance your retirement is even more futile than expecting the Leafs to win the Stanley Cup. So why are Canadians doing it? According to a recent Harris/Decima poll for Scotiabank, five per cent of Canadians looked to a lottery windfall for their “Freedom 55″—one per cent more than those who said their children would help them out. A poll of Canadians aged 45 to 64 conducted by Environics Research for TD Waterhouse was even more mind-boggling: 32 per cent said they expected a lottery win to support them post-retirement—versus 34 per cent who said they had retirement savings plans with actual dollars in them.
Polls are an inexact science. But these two do reflect just how far lotteries have insinuated themselves into Canadians’ financial expectations since Quebec launched the country’s first provincial lottery in 1970. The 1982 roll-out of Lotto 6/49 with its “Just imagine” slogan made the lottery a national pipe dream; the 2009 arrival of the $50-million jackpot Lotto Max, which admonishes Canadians to “Live your dreams to the max!” serves to further stoke the frenzy.
Playing the lottery is the country’s most popular form of gambling, contributing some $8 billion in annual revenues to the five regional lottery associations. Not that lotteries are marketed as high-stakes gambling: they’re wholesome fun to be celebrated by a “happy dance,” an “instant thrill for a dollar,” the route to “freedom” on a sandy beach or sailboat, and an opportunity to realize “dreams” while helping to fund amateur athletics and other noble social programs.
More than half of Canadians play the lotto regularly, buying a ticket at least once every two months with plans to buy again. They’re so entrenched, financial institutions are referencing them in their marketing, even creating savings products with a lottery component.
A 58-year-old underground welder in Timmins, Ont., jokes that lottery tickets comprise “the high-risk portion of my investment portfolio.” He needs the bump, he explains, given that his employer-sponsored pension plan at the company where he has worked 31 years has “taken a s–t-kicking.” He’d planned to retire at 55, then 57. Now he hopes to quit by age 60, though he’s uncertain he’ll have enough socked away by then.
He contributes to three lottery pools at work where he and his work buddies fantasize about acting out a scene from a much-broadcast lottery commercial: “We all want to tweak the boss’s nose when we walk out.” He doesn’t track how much he spends on tickets, but figures it’s $100 a month. He has won small prizes over the years—the most being $100, which he reinvested in tickets. “I don’t think lotteries are a bad thing,” he says. “Where else can you dream for a buck?”
Financial adviser Gail Vaz-Oxlade, author of Never Too Late: Take Control of Your Retirement and Your Future and drill-sergeant host of the TV show Til Debt Do Us Part, says she encounters people who expect the lottery to solve their financial problems: “But I’m so dismissive of it that I won’t even get into a conversation,” she says. “I just say ‘You’re f–king delusional’ and walk away. It’s like ‘Really? You’re more likely to get struck twice by lightning driving to the store to buy the lottery ticket than you are to win the lottery’.”
She has a point. The odds of winning Lotto Max can run as high as one in 85 million, so close to zero as to be indistinguishable. But lotteries tap into a probabilistic oddity economists call “skewness,” the idea there’s a big payday out there that corresponds to a tiny, possible odd. People who buy lottery tickets, like an executive for a Quebec conglomerate who spends $16 a week ($832 a year) on Lotto Max, hang on to that hope. “You know you have almost no chance of winning, but as long as you don’t spend lots of money why not take the chance?” he says. “Like the ads used to say: ‘You can’t win if you don’t play.’ ”
For many, the lottery offers the only possibility for the kind of instant transformation seen on TLN’s popular reality show The Lottery Changed My Life. It may be a long shot, but so is the prospect of funding retirement. A C.D. Howe Institute survey found 21 per cent of Canadians approach retirement with no savings backup beyond CPP/QPP. The Scotiabank Harris/Decima poll found 38 per cent expected to work into their retirement years out of financial necessity. That could explain an October 2010 survey by Ontario Lottery and Gaming Corp. (OLG) that shows lottery players skew slightly older than the general population: 45 per cent are aged 35 to 54; 32 per cent are over 55.
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