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CNN Wolf Blitzer Reports

Powerball: Riches or Ruin?

Aired August 22, 2001 - 20:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, CNN ANCHOR: Tonight, Powerball, riches or ruin? It's a lottery that covers almost half the country. Just three hours from now they'll draw for the jackpot, some $200 million, but you have a much better chance of being struck by lightning. Lotteries raise billions of dollars for states to spend on schools, roads and hospitals. But is all that revenue just another way of taxing those who can least afford to play? We'll debate the pros and cons of lotteries.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: We need money for tuition and this is how I'm going to get it.

(END VIDEO CLIP)

BLITZER: We'll talk to the hopefuls, live from the lottery line. And I'll speak with someone who won millions in a lottery and very nearly, lost it all.

Good evening. I'm Wolf Blitzer reporting tonight from Washington.

Powerball tickets are selling at a furious pace here in the District of Columbia and 21 states. That's because people are dreaming of winning the estimated $200 million jackpot.

You can take the money, spread out its annual payments of $8 million over 25 years. Or if you prefer, you can take $110 million in one lump sum. You'll still have to pay taxes, lots of taxes. And you'll have 60 days to make your decision. Your odds of winning, one in 80 million, but that certainly is not deterring millions of dreamers. And that's our focus tonight, Powerball, riches or ruin?

A quart of milk, a loaf of bread, and a lottery ticket? Let's go live to CNN's Kathleen Koch on the Powerball line at a Safeway supermarket here in Washington.

Kathleen, we'll know if there's a winner at 10:59 p.m. Eastern tonight, in less than three hours. What's the mood where you are right now?

KATHLEEN KOCH, CNN CORRESPONDENT: Wolf, there is a huge sense of excitement here after people buy their lottery tickets and they've been standing here in line. They'll turn back to the line and say, "Good luck." And people will cheer. So everyone is really excited.

I have seen lines throughout the city today. Lottery officials say that they are selling tickets at the rate of about 1300 a minute. That is more than 10 times what they normally sell. Now as you said, some people say oppose it. Some people say it's gambling. Some people say, you know, the odds are just ridiculously high against you, but it's not stopping anyone. For instance, let's chat with this gentleman. How many tickets are you buying?

UNIDENTIFIED MALE: One ticket for each member of my family. I have four. So I believe that if your fate is to win, you could win whether you buy one or 10 or 20. So I'm going to buy, anyway, I'm going to four for -- one for each of my family.

KOCH: Now, the odds are 80 million to one against you that you'll win this big jackpot. Why you are still here?

UNIDENTIFIED MALE: Because I got a good as chance and any. So I figured I might as well try my luck also.

KOCH: And what will you do with the money?

UNIDENTIFIED MALE: I'd pay off old student loans and send my kids to college and take an exotic trip.

KOCH: You know, Wolf, the odds are that -- well, most people buy only between one and five tickets. The last couple that won the lottery just bought three. How many you are buying?

UNIDENTIFIED MALE: Yes, this is my first time buying tickets. Actually, I'm very, very nervous. I don't want to win because I can't fall asleep with $200 million.

KOCH: I don't anybody would fall asleep who won $200 million. Now Wolf, if do you not win this Powerball jackpot tonight, officials caution you don't tear up all those tickets. You can still win other prizes. 12 percent of Powerball lottery prizes go unclaimed. So don't tear them up. You could you still win second prize. That's a neat $100,000 -- Wolf.

BLITZER: And if there's no big winner tonight, Kathleen as you know, that jackpot will simply grow. They'll be another drawing on Saturday. We'll be watching. Thank you very much. Kathleen Koch at the Safeway in Georgetown here in Washington.

And those who win, can win big. But most people who buy lottery tickets lose, and keep on losing. Can they afford it?

More now from CNN's Maria Hinojosa.

(BEGIN VIDEOTAPE)

MARIA HINOJOSA, CNN CORRESPONDENT (voice-over): Question, what is the oldest and most widespread form of state-sponsored gambling in the United States? Not the races. Not the card games. It's the lottery. RICHARD MCGOWAN, BOSTON COLLEGE: We built the Erie Canal through lottery sales. We built the Washington monument in Washington, D.C. through lottery sales.

HINOJOSA: Last year, Americans spent $38.3 billion on lottery tickets. This year, it could even be more.

REBECCA PAUL, GEORGIA STATE LOTTERY: The vast majority of the public believe that lotteries are a terrific way to raise needed revenues. It's voluntary. People enjoying playing the games.

DAVID BRONCACCIO, AUTHOR, "SQUANDERING AIMLESSLY": The lottery is more popular during a down economic cycle. It's almost an act of desperation.

HINOJOSA: Desperation that can lead to a frenzy, as people drive across state borders just to buy tickets for Powerball.

(on camera): But think about these odds. If you drive just 10 miles to buy a lottery ticket, you're 16 times more likely to die in a car accident than you are to buy the winning ticket. Your chances of winning -- 80 million to one.

BRONCACCIO: It's a tax on stupid people. And stupid is a really harsh word, but what it means is that people who are less financially sophisticated and perhaps have less of the education that is needed to understand personal finances, are the people who gravitate to the lottery.

HINOJOSA: Not so, says Rebecca Paul, who launched lotteries in Illinois, Florida and Georgia, which, along with 34 other states, use lottery revenue to pay for education and public works instead of raising taxes.

PAUL: When you look at the incredible good that's done with the dollars that are raised, and the relative innocence, if you look at all other forms of gaming that a lottery ticket provides, its a win- win for certainly legislators and their constituents who want to play.

HINOJOSA: Lottery foes are quick to note any benefits are offset by a bigger loss. The number of people who are drawn into, and hooked by, state-sponsored gambling. But these days.

UNIDENTIFIED FEMALE: If you wanted to pick up a couple tickets, we wouldn't say no.

HINOJOSA: With the media in Powerball frenzy itself, the pressure is on for everyone to get in the game.

UNIDENTIFIED MALE: Right now, most Americans, 87 percent of Americans accept gambling as a form of entertainment.

HINOJOSA: And until the lucky few stop winning millions, Americans will continue playing the game.

Maria Hinojosa, CNN, New York. (END VIDEOTAPE)

BLITZER: Let's continue that debate on Powerball politics. Joining me now from Des Moines, Iowa, Chuck Strutt. He's executive director of the Multi-state Lottery Association, which operates Powerball and other lotteries. And from Las Vegas, Nevada, Bill Thompson, a professor at UNLV and an expert on gambling in America.

Let me begin with you, Professor Thompson. What's your biggest problem with these Powerball lotteries?

WILLIAM THOMPSON, UNIVERSITY OF NEVADA-LAS VEGAS: I think it's the message we're sending to America, that the way to get ahead is buy a lottery ticket. That's not way to get ahead.

The way to get ahead is to become literate, stay in school, graduate from high school and go to college. If people would take the money they spend on lottery tickets and put $500 aside a year over 20 years, they could pay the tuition of three kids in a four-year public institution in America. And that's a guarantee to get ahead.

The kid gets through college. Nine times out of 10, he'll have a self-supporting job. About five times out of 10, he'll become affluent. One time of 10, he'll become rich. That's the American way. That's the dream in America. You work for it. You don't buy a ticket and have an 80 million to one chance of getting ahead in life.

BLITZER: Mr. Strutt, what do you say to that argument?

CHUCK STRUTT, MULTI-STATE LOTTERY ASSOCIATION.: Well, I think that's just silly. I think if people would give up going to the movies, they could earn even more money to put their children through school. Gambling is simply a form of entertainment that people enjoy doing.

People with lotteries have their detractors. And they will say and do a lot of things. But the fact is, according to the recent Gallup poll not commissioned by moralists, not commissioned by lotteries, the average lottery player was slightly higher educated than the average American and earned slightly more money than the average American. It is simply false that poor, uneducated people play.

BLITZER: And even if they are, Professor Thompson, what's wrong with giving these people at least for a few hours, the dream of becoming multi millionaires, if that's a form of entertainment?

THOMPSON: I think a dream is one thing, but I don't know why governments are selling this dream. Government should do what we can't do for ourselves. Jefferson said the best government is the government that governs least. Lincoln said government should do what we can't do for ourselves. There are many things government doesn't do.

Yet, we're spending $1 billion dollars a year. Governments are spending that money advertising lotteries, telling people the way to get ahead is to buy a dream. If we took that million dollars and told kids to stay in school. our society would be lot better off.

BLITZER: And Mr. Strutt, there are a lot of people waiting in lines all over the country tonight for this Powerball lottery. We'll show some pictures of some of those people waiting in line. But there's no doubt that the government, being in the gambling business, is a huge source of controversy out there. Is that the message state governments should be sending?

STRUTT: George Washington ran a lottery. Ben Franklin ran a lottery to fund the Revolutionary War. John Hancock ran a lottery to restore historic buildings. We repeat history if we don't learn from history. We had private lotteries in this country, like in much of the world, until the mid-1850s when they became corrupt and were outlawed.

Finally in about 1964, modern lotteries came back into play. And they need to be governed, but run to keep them honest. People want to play honest lotteries. And they want state-run lotteries.

THOMPSON: Yes, we have a question there. What if the lottery's not honest? It's government run. Who regulates it? Who's going to shut it down? You know in Pennsylvania, the number was rigged and you know it's happened in many states around this country.

Lotteries have been dishonest. You know what happens the next week there's a lottery game. In Las Vegas, if a casino is caught cheating, it's patron, the casino, loses its license. It's private and there is a government that regulates it. Who regulates these lotteries to make sure that they're honest. The ping-pong ball machine's honest? The computer's honest?

BLITZER: Mr. Strutt, that's a very serious allegation. What do you say about that?

STRUTT: Of course, government is not one big corporate entity. There are attorney general's offices. There are the police force, enforcement agencies. Lottery is regulated by different branches of government. We simply have had to become, because of issues that have arisen -- questions that have arisen from private -- from personal individuals trying to defraud the system, become very a very secure operation. And I think most people trust them and well they should.

BLITZER: And Mr. Strutt, Professor Thompson also said that the lotteries, the various state lotteries spend a billion dollars a year simply in advertising. Is that accurate? STRUTT: They spend 3 to 4 percent of the amount in advertising.

THOMPSON: Yes ,of $38 billion, 3 to 4 percent of $38 billion.

STRUTT: Right.

THOMPSON: Right.

STRUTT: That's a very small percentage for any product.

THOMPSON: That's like $2 billion to tell people the way to get ahead in life is to buy a ticket. And I wonder what is the public policy in creating multimillionaires in America? You know, I hear from the government all the time that oh, it's the rich, and the rich versus poor. But here we have the poor people of America and the general public getting together to create a few rich people.

STRUTT: That is...

THOMPSON: Why are we doing this?

STRUTT: This absolutely not true. It is the middle class that supports the lotteries. If you going to sell a product for a dollar, you have to sell it...

THOMPSON: You have more lottery outlets in poor neighborhoods in America.

STRUTT: Well, of course, that's where gas stations. That's where grocery stores are.

THOMPSON: Of course? Yes, of course and poor people buying tickets.

STRUTT: Are there going to be -- is there a lottery outlet across from where Wolf Blitzer lives? No. It is in the gas stations and convenience stores.

THOMPSON: I don't -- that's right, the convenience store. And you just happen to have more of them in the less affluent neighborhoods. There's been study after study that shows this.

BLITZER: Professor...

STRUTT: They are no convenience store or gas stations in the affluent neighborhoods. Homes in the gated communities.

BLITZER: Professor Thompson, there's nobody forcing these people to wait in line and go spend their $1, $5, $10. They obviously want to do it.

THOMPSON: I tell you what, they obviously want to do it. And the public is wanting something that is adverse to the public interest. Where is public good in creating somebody that's going to be worth $100 or $200 million? I don't see the public good. And this is the government that's doing it. It's not private enterprise.

STRUTT: Lotteries exist because public wants them. They demand them from the government.

THOMPSON: They do not demand them. Every lottery that's been started and it's been started because a lottery supply company has gone out and financed the campaign. You know how it was in California when Scientific Gains came in, spent $2 million, put the campaign together. And they won a $40 million contract the first year of the lottery. It's not the public demand.

STRUTT: Perhaps. BLITZER: One at time. Go ahead, Mr...

STRUTT: Perhaps they worked to convince the legislators to listen to the public.

THOMPSON: They convinced the legislature that it's free money that drops out of the sky and they're going to build all the schools and not have to raise taxes. I'll tell you what. California got a lot of education money and the schools are no better that California today than they were in 1985.

BLITZER: But that isn't the fault of the lottery system, Professor Thompson. Isn't it a fact thought that billions of dollars have gone to schools, to hospitals, to road building throughout the country?

THOMPSON: It's money that comes out of an economy that's already there. It's not money that drops out of the sky. There are other mechanisms, other means of taxation. It'll be much more progressive, much more equitable to get the money and the services. Here's money that goes from middle class and lower income categories and goes to services that help middle class and affluent as with the Georgia scholarships.

STRUTT: It is certainly true that the government can more easily and efficiently raise money simply by going into your home and taking property.

THOMPSON: What's more efficiently -- look, to raise 40 cents...

BLITZER: Unfortunately...

THOMPSON: It costs the government 10 cents with the lottery. You can do it much more efficiently otherwise.

BLITZER: Gentlemen...

STRUTT: Taxes are much more efficient.

BLITZER: Gentlemen, unfortunately, we have to leave it right there. It was kind of both of you to join us. Chuck Strutt, William Thompson. This debate will continue. We'll see if we get a Powerball winner tonight. Thank you very much to both of you for joining us.

And as Powerball players look for that pot of gold, a couple of magazines hit the jackpot, scoring interviews with Congressman Gary Condit. But first, easy come, easy go. I'll speak with a man who won and lost a lottery fortune. Stay with us.

If you buy 50 tickets a week, you'll win the jackpot once over 30,000 years.

(COMMERCIAL BREAK)

BLITZER: You're looking a live picture of lottery sales here in Washington. They're buying Powerball tickets, getting ready for the big drawing, 10:59 Eastern tonight. We'll see if someone wins $200 million.

Welcome back. Powerball hopefuls, consider the story of Curtis Sharp. He gained riches and came to close to ruin. A winner of $5.6 million in the 1982 New York State lottery, Sharp gave much of it away and lost much of it to the bad investments.

Curtis Sharp joins me now live from Nashville, Tennessee. Mr. Sharp, thanks so much for joining us.

What happened to all that money you made?

CURTIS SHARP, FORMER LOTTERY WINNER: Well, I still got some of it. Still spending it.

BLITZER: How much you have?

SHARP: Well, I got two more payments left.

BLITZER: But you lost almost all of it?

SHARP: I lost quite a bit of it.

BLITZER: What happened? What happened to it?

SHARP: Well, I made bad investments. And I, you know, I'm a -- I believe in spending. You know, it came easy. So I, you know, I spend it easy.

BLITZER: What did you spend it on? What were your biggest mistakes looking back over these nearly 20 years.

SHARP: My biggest mistakes was letting other people tell me how to invest. That was my biggest mistake.

BLITZER: Were these friends, relatives, professional financial advisers?

SHARP: A couple of them was professionals, supposedly.

BLITZER: And they just gave you bad -- did they make a lot money on your money?

SHARP: Some of them did.

BLITZER: And so, that's a lesson that you learned obviously very painfully?

SHARP: That's right. But through it all, I'm OK.

BLITZER: And how did all that affect you and your immediate family?

SHARP: Well, as you know, I've been married twice. And I took care -- my first family and my second family. So I was the one that was doing kind of bad at times. But thank God, He brought me through all of that. BLITZER: But people immediately -- you probably immediately discovered once you won that more than $5 million, that you a lot more friends than you thought you had originally, didn't you?

SHARP: Oh, man. I had people coming back from the grave.

(LAUGHTER)

BLITZER: You probably had a lot more relatives than you once thought that as well?

SHARP: That's right . I tell you, they came back from the grave.

BLITZER: They were looking for you. What advice do you have for the next -- someone who wins $200 million dollars tonight in the Powerball lottery?

SHARP: Well, the -- what I have for them is that it was me that won that, I would just take off about three weeks. That's the advice I would give a person that whoever wins that kind of money. I would just take off about three weeks and clear the cobwebs out of my head and sort of plan this thing out, because I wouldn't do what I did in the beginning.

What I did, I wouldn't do that no more. In other words, I wouldn't, the whole world wouldn't know I won like I did before.

BLITZER: You'd keep it quiet?

SHARP: Yes.

BLITZER: You wouldn't advertise the fact that you were a millionaire?

SHARP: Right, right, because you know, I wouldn't be able to get no peace or nothing. Because if I was to win something like that, wouldn't too many people know about it.

BLITZER: Did you quit your job after you won all that money?

SHARP: No, I worked eight years after I won. Thank God I did.

BLITZER: The same job that you had?

SHARP: Yes, I did.

BLITZER: All right . And you say thank God because that's that money obviously that you need right now?

(LAUGHTER)

SHARP: Come in handy.

BLITZER: The money factor.

SHARP: Yes. BLITZER: Any last-minute tip you have for somebody who wants to buy a ticket? You were lucky once. Did do anything special to win that lottery?

SHARP: No, I didn't. I was just putting down any numbers. And everybody that put a dollar in has chance to win. And it's worth putting a dollar in. I mean, a lot of people talk down on the lottery, but they don't talk down on alcohol and cigarettes and stuff that's killing people. I mean, I would take a chance for $1. You know.

BLITZER: OK.

SHARP: You know, it's a thing that it ain't harming nobody. None of this you're harming yourself.

BLITZER: All right. Curtis Sharp, you're obviously -- you may not be a lot richer than you once were, but you are obviously a lot wiser. I want to thank you very much for joining us tonight. Thanks very much.

SHARP: Thank you. You have a blessed day.

BLITZER: Thank you. And this programming note, you'll be able see the Powerball numbers on "CNN TONIGHT," 11:00 p.m. Eastern.

And just ahead, Jesse Helms, he's been called "Senator No." Now he's saying, no more. And investigators find shocking evidence of what caused this deadly fire in Hollywood, California. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back. In other top stories tonight, Representative Gary Condit trying to explain his role in the controversy surrounding the disappearance of Chandra Levy. Condit has talked to "People" magazine and will be on the cover of the next issue with his wife. He's also talking to "Newsweek."

200,000 letters to Condit's constituents are going out from a Modesto, California post office. And he gives his first broadcast interview to ABC's Connie Chung tomorrow.

When it comes down to deciding on one more term as a U.S. senator from North Carolina, Jesse Helms says "I shall not." The 79-year-old Helms appeared on a North Carolina television station to tell voters that 30 years in the senate will be enough. The conservative Republican has suffered a number of health problems in the last few years.

The nation's once rosy budget surplus isn't so rosy anymore. White House projections released today show this year's expected surplus has shrunk to about $158 billion, down from $281 billion projected back in April. This sets the stage for a battle with Democrats over spending priorities. What's caused the drop? The sluggish economy, the income tax cut, and more than expected government spending. Authorities say a fire that killed two people Thursday at a Hollywood apartment building was deliberately set. Fire officials say they found about 40 gallons of gasoline spread on the floors of the building known as the Palomar Hotel. Among the victims, a 38-year-old woman who managed to hand her two children to firefighters before she fell.

Up next, I'll open our mailbag. Can Congressman Gary Condit come back? We'll hear from one of his constituents. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back. Time now to open our mailbag. Many of you e-mailed me about Gary Condit's interview tomorrow night with Connie Chung.

Matina from St. Louis writes this. "Mr. Condit is again showing his conceited, narcissistic personality. He probably thinks that since she is a woman, he can charm her like his past conquests into going easy on him."

Lisa from Syracuse. "I frankly do not care what Condit has to say. The only reason he is speaking to anyone is to save his own career without any regard for individuals such as his supposed friend, Chandra Levy."

But Chris from Modesto, California writes, "Gary has done wonderful things for this part of the Central Valley and his love life will not and has never interfered with the way he has represented us. Gary will be re-elected."

Remember, I want to hear from you. Please e-mail me at Wolf@cnn.com. And you can read my daily online column and sign up for my e-mail previewing our nightly programs by going to my web site, www.cnn.com/wolf.

That's all the time we have tonight. Thanks very much for watching. I'm Wolf Blitzer in Washington. "THE POINT" begins right now.

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