Lottery is a rip-off

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Originally Posted By: Tempest
Had to look up punter. The only punters we have here are on the football field.
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Thought I'd throw in some vernacular for people to ponder. Around here, there's lots of olde slang.

Originally Posted By: Tempest
I see nothing wrong with having gaming machines "hold" money in electronic form and simply cashing out as needed. 10's of thousands of those around here. Just push the cash out button and leave.


I didn't (and still don't) have a problem with the money sitting there in the machine either. Couldn't understand why there was pressure to make winnings removed from the machine before re-investment...or why the industry was so vehemently opposed to it.

However, I know one guy, an ex pat Pom who was describing exactly that in the UK, and when you've got $100 in your hand from winnings, it's that much harder to put it back in. Whereas in Oz, it's still the pub's money as he continues to press the button.

It's a minor nuance in behaviour, that doesn't affect me in the slightest, but I can see how having a hand full of cash might change your behaviour.

Similarly when they took the arm off the one armed bandits, and made them purely electronic, spending through them went up massively almost overnight.

A guy I used to work with started buying his smokes with cash rather than a credit card. Made him aware of the size of the money that he was actually taking out of his wallet.

Then he stopped buying them, donating the same amount of hard cash into a second wallet...handling the cash helped him stop smoking through it's psychological effect.

Originally Posted By: Tempest
As to the first question, are you saying that people should be prevented from buying lottery tickets with a credit card?


Similar to the above.

Up until last year, you could only gamble on Cash or EFTPOS savings/qhequing accounts. The logic was that you could only lose what you had to lose.

That's been changed to being able to gamble away credit...Big change IMO, but again, one that doesn't impact me greatly.

The Mum of a kid in my son's class now uses the credit card, and the poker machines to punish her husband after fights. She goes down, blows $700, and he gets the bill plus interest...she's mentally defective, and I beleive wants him to leave, and her children suffer greatly

and that's not the poker machine, gambling industry, or Govt's fault...but now the pressure is on to install finger print scanners on every machine, to stop gamblers "when they've had enough"
 
In some states you can't buy scratch offs or lottery with a credit card. Not sure if it's a state rule, but some here don't want you to buy those with a check as well.
 
There's workarounds for all the rules.

A guy I know used to cash a cheque, say for $500, bank $300 at the ATM, and gamble the $200, next day he'd do it again, next day again etc.

When the cheques finally made their way back into the bank, there was always enough cash to cover them...up to the point that the system crashed of course.
 
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handling the cash helped him stop smoking through it's psychological effect.

I get that. I've never smoked cancer sticks but I've over indulged the plastic in the past. Cash only (or at least mostly) is a good policy.

There was some push to allow credit cards directly inserted in gaming machines here, but the public outrage was staunchly against it.

There are ATMs around but it is that extra step with cash in hand.

Lottery tickets are usually bought a few at a time and you actually have to handle them so I don't really see that in the same light.
 
Mathematically they are the same, but psychologically human (also in observed in Monkeys) have a tendency to hold on to a large physical resource that they can SEE rather than wasting it away.

One study have the monkeys decide to pick a candy vs a stone. If the monkey pick the stone, a lot more candy will be dispensed. If the monkey pick the candy, the candy will be taken away. The monkey keeps picking the candy instead of the stone. When they replace the physical candy and stone with a symbol, the monkey will instead keep picking the stone and gets lots of candy.

That explain why some people have problem being a discipline spender with borrowed money, but others see borrowed money the same as cash.

The main reason you cannot use credit card to buy lottery, is the same reason you cannot buy stamps with credit card, because the fees are charged to the merchants and the suppliers (lottery and the post offices) will not pay for the credit card fees and they make nothing (or even lose money) in the transaction.
 
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About the OP -

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But when you win the jackpot you will only get the full prize if you choose 20-30 year payments. If you choose lump-sum you will get about 55% of the prize value before tax, after tax (federal and state if applicable) the remaining is about 35-40%.


Skimming the many replies, I did not see that anyone addressed the issue above - the lump sum is not a rip off.

A lump sum or payments works out to about the same amount over the long term. It's called the Present Value of an Ordinary Annuity (PVoa).

http://www.getobjects.com/Components/Finance/TVM/pva.html
"PVoa is the value of a stream of expected or promised future payments that have been discounted to a single equivalent value today. It is extremely useful for comparing two separate cash flows that differ in some way."

If you take the lump sum and invest it (rather than spending it on consumer goods) after 20 years (or however long the lottery would take to payout) you would have approximately the same amount. Of course, you don't have the lump sum to spend, which itself is of some value.

If I were in my 20s-30s I would go payments, but since I'm at the big 50, gimme the cash, please.

On a different topic, the USPS accepts credit cards -
http://www.usps.com/postagenow/welcome.htm
 
Originally Posted By: stranger706
I get what you're saying but I don't think I'd be too unhappy about winning 35% of 54 million dollars. Heck, I'd be happy with 10%.
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Originally Posted By: Shannow
There's workarounds for all the rules.

A guy I know used to cash a cheque, say for $500, bank $300 at the ATM, and gamble the $200, next day he'd do it again, next day again etc.

When the cheques finally made their way back into the bank, there was always enough cash to cover them...up to the point that the system crashed of course.


http://en.wikipedia.org/wiki/Check_kiting
 
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