Megabuckpowerballs...Follow

Sounds like a cartoon superhero.

My husband is a real sucker for reality shows. This weekend he was watching one about lottery mega-winners. These lotteries that pay out millions on a 1:175 million chance of winning are nearly all run by the states.

Best I can tell in most state lotteries the money that is taken in is doled out something like this:

40-60% - Prize money
30-40% - State Earnings (may or may not be ear-marked depending on local legislation)
5-7% - Retailers (sellers)
3-7% - Operating costs

It makes sense I guess that if you're going to encourage gambling, you might as well let the government run it to try and keep it as clean and honest as possible and to put the profits to best public use; And governments big and small all over the world offer up legal gambling in an effort to pad their own coffers.

Still, it seems manipulative. The poor sole who will never see millions is offered up a fantasy - for only a buck. I'm guessing that the largest bulk of tickets are sold to the financially challenged masses. I doubt the Walton's are sitting around the family mansion scratching tickets and picking 'lucky' numbers.

Is it a good way for the poors to spread around it's pennies?

Georgia used it to pay for college scholarships when they first implemented it. It's since been spread more evenly around the educational pie, including Pre-K and stuff.

It's not the scratch offs, though. You can either pick your own numbers or let the machine pick for you. I let the machine pick 'em. I'm lazy.

There's no way you can stop people from gambling, may as well use the money earned through that to fund the state government and use it for something that benefits the people who bought the lottery tickets.

Now? They've been advertising as long as I can remember.

The funny thing (for certain interpretations of "funny") is that state governments which allow gambling usually have very strict laws about payout rates. So slot machines may be required to pay out 90% of the money that's put into the machine, for example. My understanding is that about the lowest payout rate required for any private form of gambling is horse racing at like 80%. Most state lotteries, on the other hand, are pegged at around 50%. So we're starting with an institution in which the governments engage in behavior which would be illegal in the private sector. And I suppose you could argue that this is ok, cause governments can do that sort of thing, but then we get right back to what lotteries really are: Taxes on stupid people.


There's a part of me that dislikes the whole deal. Governments shouldn't take advantage of the people they're supposed to serve. But then on the other hand, if the alternative is "tax the rich/smart/successful more", I tend to lean the other way. I just wish that the whole "let people make stupid choices which negatively affect them" ideas were more consistently applied. It just seems counterproductive to cash in on the "stupid choices" people make and then applying so much of the money to addressing the symptoms of those same stupid choices. Maybe if we just didn't do that in the first place, people would be better off? Just a crazy thought!


Oh. Did the show discuss long term wealth effects for the lottery winners? My understanding is that an alarmingly high percentage of those who do manage to win big end out losing most or all of the money within a few years anyway (cause... stupid choices right?). Just curious if there were some numbers on that, or if it was discussed at all. It's an additional factor to the whole thing that just adds to the absurdity IMO. All these people blowing money they can't afford to spend on an incredibly slim hope of "winning", when the odds are what they win wont help them out in the long run anyway. Just makes the whole thing seem so pointless.

That's against freedom.

We just publish your name in the paper and the "financial advisers" tend to find you pretty quickly.

My 2 seconds of internet searching ended up bring up 70% a couple of times, but I didn't really look into it much beyond typing "how often do lotto winners go broke?" into google and clicking on a couple of links. I've also heard that the majority squander their earnings within a few years though.

I believe the state strongly advises you get a financial planner and has several lined up to assist you but obviously they can't force you to take advantage or listen to them. But it's in the state's best interests that the lottery winner roster isn't a tale of broken dreams and new poverty so they'll at least go through the efforts of trying to hook you up. I'm speaking generally of course and your mileage may vary by state.

I don't have any strong opinions on the lottery itself and I'm another "play when the payout is huge and mainly just for the daydreams" player. Granted, I could daydream for free but playing maybe six times a year (if that) isn't enough of a financial hit for me to care if it's "smart" or not. I suppose it does condone some forms of gambling but that's only an issue if you don't condone the same. Personally, I don't care much about state regulated gaming either way.

Illinois has been advertising its lottery since forever in my memory. Even from the 80's and 90's I remember the "Someone's going to win, might as well be you" and "Got to play to win" sales pitches. That and the televised drawings with the ball machines.


"I'm a millionaire! Suddenly I have an opinion on the capital gains tax." - Leela, Futurama

I assume the state does as much as it needs to do to maintain a degree of plausible effort in the face of potential criticism and to let everyone involved sleep at night.

Your big chance to make a rational humane statement about the size of government and what services it should and shouldn't be providing. Better to bleed dry the the poor dumb slobs than expect your rich millionaire friends to help fund their government. Btw, have they trickled on you yet?

How about we (the people) don't exploit our poor misinformed masses but instead tax everyone equitably?

I actually counted out 5 pennies from my dashboard stash to get to a buck-fifty for this mornings coffee purchase.

It's time to do something about pennies. They need to go away. Really we could be rid of nickles and dimes too.

Fantasizing about getting a dime is kinda lame.

Weren't the Waltons struggling through the depression as farmers or something?

Edit: Oops, wrong wrong Waltons

Edited, Apr 1st 2014 7:24pm by trickybeck