Posted on 01/13/2016 4:33:03 AM PST by Kaslin
Ka-ching! Wednesday's Powerball jackpot soared to $1.5 billion as get-rich-quick mania seized America this week. But you don't need to wait for the drawing to know who'll score the royal payoff.
The biggest winner of the multistate numbers game is -- drumroll, please -- Uncle Sam.
Powerball is a government-sponsored gambling racket in 44 states, plus Washington, D.C., Puerto Rico and the Virgin Islands. The feds automatically skim 25 percent off the top of a lump-sum cash award. Additional state withholding taxes vary depending on residency status. Mega-winners are taxed at the highest federal income tax bracket (nearly 40 percent); those who live in states with personal income taxes could pay up to an additional 9 percent. Local municipal taxes can add another 3-5 percent to the tax burden.
Government lotteries of all kinds raked in a whopping $70 billon in revenue last year, according to the North American Association of State and Provincial Lotteries. Cash-strapped states pitch the rackets as civic enterprises by purporting to earmark a portion of proceeds for public education, economic development and mass transit, senior citizens' programs, professional sports stadiums and environmental protection.
As I've noted during previous, high-stakes lotto crazes, the state bureaucrats who run these schemes for numeracy-challenged consumers are free to ban outside competition -- including private slot machines, phone betting, instant pull tabs and card rooms. The feds help out by limiting sweepstakes and Internet gambling, as well as exempting state lottery marketing materials from Federal Trade Commission regulations that guarantee truth in advertising.
That's right. While cracking down on ads on everything from cereal to toothpaste to cars, Washington protects states that spend hundreds of millions of dollars every year falsely promising "a dollar and a dream," "everyone is a winner" and "somebody's gotta win -- might as well be you."
In New York last fall, the attorney general outlawed fantasy sports league as illegal games of chance that deceptively hooked in the gullible -- while the state lottery promoted its motto, "Hey, You Never Know."
I know double-standards sanctimony when I see it.
If public lottery pimps were private corporate entities, they'd be charged with predatory behavior. To entice their at-risk target audience of elderly citizens and low-wage workers, state officials saturate the airwaves around the first of each month. Why? As a candid advertising plan for the Ohio Super Lotto directed many years ago:
"Schedule heavier media weight during those times of the month where consumer disposable income peaks. ... Government benefits, payroll and Social Security payments are released on the first Tuesday of each calendar month.''
Billboards in Chicago slums claim lottery purchases "could be your ticket out." The Illinois lottery lures players to "joy someone with holiday scratch-offs." In Maine, an analysis by Cornell University and the Maine Center for Public Interest Reporting last fall found: "For every one percent increase in joblessness in a given zip code, lottery sales jump 10 percent, the original research shows. And people in Maine's poorest regions spend as much as 200 times more person than those in wealthier areas."
"By enticing people to spend their money on fantasies," veteran gambling historian Robert Goodman points out, "governments are preying on people's ability to dream and hope. Rather than providing real hope for economic improvement, public officials are promoting the illusion of economic improvement-- becoming deeply involved in finding new ways of manipulating people's desire for a more secure future. They are enticing people into taking part in what should properly be called the 'pathology of hope.'"
The government gambling industry spins lotteries as good, innocent fun that benefits the children. Always "For The Children." But countless studies show two things:
First, a significant portion of lottery sales are driven by financial desperation and delusion, not by entertainment. During the 2008 recession, 29 of 42 states with lotteries saw huge spikes in lottery sales -- with sales records set in New York, New Jersey and Connecticut, where purchases are greatest in the states' poorest counties.
"When people view themselves as doing worse financially, then that motivates them to purchase lottery tickets," Emily Haisley, a postdoctoral associate at the Yale School of Management who researched lottery behavior, told The New York Times. "People look to the lottery to get back to where they were financially."
Second, multiple investigations of states that divert a portion of lottery revenues to public education have shown that on average, those states spend a smaller proportion of their budgets on education than states that do not have a lottery.
Remember: All government revenue is fungible. Lottery funds end up supplanting regular income, not supplementing it. As players lose interest, the states must cut the number of prizes, make longer odds, inflate the jackpots and market even more aggressively (and deceptively) to make more money.
Government-run lottery monopolies are a regressive tax and a stupidity tax.
Inject this truth in inner-city Powerball billboard advertising: The odds are never in your favor.
Governments cynically destroy their people.
All true...but if dropping a few bucks to take a chance - however minute - is not going to kill me. It’s a given that the government will get a good chunk of it, but I could live out the remainder of my life with the rest.
There is hardly any form of gambling where the “house” doesn’t come out ahead.
That lottery is the biggest scam there is. First off the chances of winning are about the same as picking a specific second in a 9 year period, and then if by some miracle you do win, they steal the money back! So they are taking in income twice - First by all the suckers who play it and then from the person who “wins” it. Why should ANY income tax be paid when it is a lottery run by the government? And they get most of the money! And I love what they did with Mega-Lotto here in New York ...They decided too many people were “winning” so they raised the amount of numbers you had to pick from 54 to 70 increasing the odds you will lose.
A few years ago some woman won the Powerball of several hundred million Dollars by only buying one ticket. I call this pure luck. Buying $700 worth of tickets like some woman did in California last week is foolish.
“Government lotteries of all kinds raked in a whopping $70 billon in revenue last year”
But, I could have SWORE I read that (Chicago?) couldn’t even pay out the CURRENT winners?!
I guess it’s govt rakes in billions in revenue...and spends trillions /s
Just buying *two* tickets most significantly increases the probability of winning--from 1/292M to 1/146M. That's the best bang for the buck. The increases drop from there.
That's 350 $2 tickets. How do you keep track of that many numbers?
What are the odds that her dog ate/pissed on/sh*t on the winning ticket?
Last week I bought ten tickets.
I go “zero” numbers. I think I should get a prize for that. What are the odds of picking 30 numbers and not getting a single one.
It was the State of Illinois, not Chicago who couldn’t pay the winner(s)
40% of every lottery goes into the pockets of uncle sugar ($600m)
and 2/3s of that is poured directly into entitlement programs ($400m)
For a lot of people, it’s the only tax they pay.
When I was living in New Hampshire there was a “feel good” story in the Boston Herald about a guy with a host of financial difficulties: car about to get repossessed, behind on rent and about to get kicked out, down to his last $20. He was sent out to buy food for his kids but instead he bought lottery tickets and hit some big scratchoff prize, 50 or 100 grand. The first thought I had was “what about all of the people in the same situation who spent the last of their money and lost?”
It’s no secret that the number of lottery tickets sold in a neighborhood is inversely proportional to the average income. But who is really paying for all of those tickets? Do you think that if a family that is already on the edge blows their money on a dream that they will A) Suck it up and make do with less until the next check comes in or B) Go to the government for more handouts? Sure, the lottery is a tax on the stupid but when the stupid don’t have any money to begin with who actually pays that tax? We do.
Short example of what’s possible:
$1.5B pot
$930M Lump sum, pre-tax.
~$590 after tax payout
30% of taxable income is max amount of deductible, charitable contributions.
~$280M
At a 40% tax rate, ~$110M would be refunded in 2017.
Give away the remaining $280M
In 2 yrs:
You’ll have given away all $590M and still have $110M.
A scratch off with happy birthday written on it is cheaper than most greeting cards At least there is a chance for a greater reward along with the fun it creates.
Lotteries have been around since the start of the nation.
Dont play if you don’t like it.
The Illinois story is amazing.
They collect the cash from lottery buyers, then spend it somewhere else, and then have no cash to pay the winners.
Can you say Ponzi scheme!?
I thought you could.
Illinois officials should go straight to jail—no trial needed.
No Doubt
It's a grotesque cancer relentlessly sapping health from the entire body.
True.
And it costs less than a movie, gives a free 3-day point of conversation, and actual HOPE for something.
I hope deserving people win it and help our poor, veterans, and children of our military who’ve given all.
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