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"Investing" in the Lottery

Now that the dust has cleared following the largest ever Powerball jackpot – over $1.5 billion – we can look more objectively at the game. The frenzy leading up to the last few drawings, as the jackpot grew and grew, was extreme. The media gave it significant play, including exhortations to viewers and listeners (not to mention readers) to participate. You know, “you can’t win if you don’t play” and “everyone here is buying tickets”. The media also highlighted the excitement among the lottery officials and their views on participation. It makes one wonder whose side the media really is on and whether they really understand the concept of the lottery.

In one way of course, it all makes sense. Folks, for the most part, like to dream and a dream about how one would spend some easy money – a LOT of easy money – is a fun dream to have. Buying a ticket or more allows one to pursue that dream and enjoy it, at least until the drawing is done and a jackpot winner or winners are announced. This is not to say that there are MANY winners, of a few dollars each, but that doesn’t fuel any dreams for most folks I know.

What is unnoticed for the most part is who or what the real winners are in this game. Depending on the state, education or the education establishment is definitely a winner. Much of the proceeds of ticket sales, after operating costs such as salaries for the many employees, goes directly to education in some form. That would appear to be good for the educators receiving the money as well as, perhaps, the students who attend the institutions benefitted.

Another big and regular winner is the tax man. Because of the size of the jackpots – even when shared among multiple winners – the winnings themselves, whether taken as a lump sum or as an annuity – will be heavily taxed at the federal and state level. More money for the politicians to spend and it is NOT tied to education goals at all.

When we look at the percentage of the ticket sales that go to the individual winners, we quickly see that they get the short end of this game. The government, which runs this gamble, gets money for goals we probably all support and then gets more money in taxes for goals that may not be as sought after by the taxpayers as a whole. It might be a good idea to remember that the dream you pay for with your lottery purchase is actually fulfilling someone else’s certainty. 

1 Comment to "Investing" in the Lottery:

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Free Equity Tips on Wednesday, January 20, 2016 5:49 AM
Really great platform where this kinds of investment opportunity available. I like this blog because there are i learn lots of interesting news.
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