Lottery is a rip-off

[HTSS_TR]

Don't you think lottery is a rip-off ? They sell lotteries and set aside a percentage of sold tickets for the prizes. 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%.

Case in point, a lady won $54 mil jackpot and only get $30 mil in lump-sum before tax, after tax she will get only about $20 mil. The tickets sold was more than $80 mil, but they paid out a total of less than $35 mil ($30 mil for jackpot and less than $5 mil for misc prizes). The paid out is less than 50% of tickets sold, or another word is they profit more than 50% of the revenue.

No wonder so many states want to sale lottery tickets of all kinds, the profit is so great for the sellers. The lottery players are real suckers.

http://www.nypost.com/p/news/local/brooklyn/gilded_cage_for_jail_guard_YfbhNwgqc0ICMGZHedBeYO

 

[UncleS2]

Well, DUH! Lotteries are financed by- some say they are an unfair tax levied on- the mathematically challenged.

 

[BobFout]

A lottery is gambling, the odds are never in the player's favor. You really wanna know how much money Vegas / Biloxi / Atlantic City etc all pay out vs. take in?

 

[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%.

In Florida a big chunk of the lottery goes to education.

 

[wallyuwl]

Originally Posted By: BobFout
A lottery is gambling, the odds are never in the player's favor. You really wanna know how much money Vegas / Biloxi / Atlantic City etc all pay out vs. take in?

While all casinos differ, in general casino's set their slot machines to pay out about 98% of what they take in. The remaining 2% is profit. It is volume that makes them millions (that 2% over many, many, many people and machines). The rules for other games are set up to make sure the house makes out ahead, but it is harder to control games like blackjack and such. Whereas with slots they are all computer controlled.

 

[mechtech2]

Lotteries are gambling. Fine, great. A little spice to life.

What get's me is that it's illegal for civilians, but OK for the Gov't because they say it is used for schools and such [insert crying barefoot child here].
The money evaporates and there is more bureaucracy and worse schools.
And the money involved is huge.

 

[Shannow]

My state lotteries were making $400M per annum in profit (voluntary taxation).

So they sold it to a private entity for under 3 years worth of profit...

When my inlaws had their newsagency in a nmall country town, the 2-3% commission on lotteries products paid for both their wages.

When you see old people putting $50, $60, $100 into the lotteries every week, it stinks that it's going to a private entity that will not be providing any of their services.

 

[Eddie]

Something like a Ponsi(sp) scheme.

 

[SZR48207]

Originally Posted By: wallyuwl
Originally Posted By: BobFout
A lottery is gambling, the odds are never in the player's favor. You really wanna know how much money Vegas / Biloxi / Atlantic City etc all pay out vs. take in?

While all casinos differ, in general casino's set their slot machines to pay out about 98% of what they take in. The remaining 2% is profit. It is volume that makes them millions (that 2% over many, many, many people and machines). The rules for other games are set up to make sure the house makes out ahead, but it is harder to control games like blackjack and such. Whereas with slots they are all computer controlled.


Not necessarily. Nevada gaming laws stipulate that, in order for a casino to claim 98% payback on slots, only ONE machine in the house would have to pay back that amount for the casino to legally advertise that statistic.

I don't believe there is a minimum payback, but I'd bet the worst machines still pay back around 50%.

Here in OK, we have a ton of Indian casinos, but our state law and the tribal gaming pact make no provisions to ensure fairness. For all we know, the slots in these Indian casinos could only be paying back 15%.

 

[AuthorEditor]

Near where I live a retired man of modest means gambled away all his savings on the lottery. When his wife found out he killed himself. Gambling preys on those with an addiction. Great way for states to raise revenue...

 

[Jim 5]

A smarter man that me once said that lotteries are "voluntary taxes for the stupid".

 

[JHZR2]

I dont see that payout structure as a ripoff, they generally show it in the not so fine print. The mathematics of the lottery on the other hand do not put odds in the favor of the ticketholder, as one would expect.

But then remember it is what? 50% less than that after taxes? far less money than advertised I bet.

if it goes to something useful, like schools or whatnot, I guess it is not a big deal. Not my problem if people cant understand the odds.

 

[crinkles]

it's called the idiot's tax for a reason.

but you gotta be in it to win it.

mathematically, between owning one ticket and a hundred tickets for a draw there isn't a meaningful real world difference in odds. so if i do play I only get the minimum number of tickets ($4.80 for 8 tickets). that way i am not spending money on it too bad.

 

[Pablo]

Originally Posted By: Shannow
My state lotteries were making $400M per annum in profit (voluntary taxation).

So they sold it to a private entity for under 3 years worth of profit...

When my inlaws had their newsagency in a nmall country town, the 2-3% commission on lotteries products paid for both their wages.

When you see old people putting $50, $60, $100 into the lotteries every week, it stinks that it's going to a private entity that will not be providing any of their services.


I think your usual (political) diatribe against private business left a couple things out.

States promise all kinds of good things with lottery money to get the lottos in place. It's doesn't take too long before the money goes into general funds and is pretty much squandered like most all of our collected by force moneys.

 

[RTexasF]

I doubt the winners think it's a rip off.

 

[Rhymingmechanic]

I heard a radio segment about people who ruined their lives by winning the lottery. Some went into debt because they spent like millionaires while only getting a small portion of the winning amount every year. Others had relatives and friends always hitting them up for money. Apparently it is somebody's job to try getting winners to take a lump sum payment, at a fraction of the prize, instead of the long-term checks.

 

[Jakegday]

i guess i dont understand the rip off... they paid 1 dollar and got 20 million in return?

 

[BigNick]

No taxation on winnings in Canada! You win a jackpot.. you get it all...

 

[Scienceman]

I do not like the lottery.

 

[Smokescreen]

Fill a large gymnasium with ping pong balls.

Dive into the middle of it and pull out the single ball that has been chosen as the winner.

Good luck.

If you play the lottery, you don't understand math...at all.