Betting On State Lottery Taxes
The lottery ticket buyer gaped at the expected value incredulously, but feverishly moved forward to purchase the ticket, and soon may do the bidding online. More lottery tax results on the news at eleven…
Go ahead and call me a skeptic, a cynic, or even a pessimist. I won’t have a problem with that. When I feel the vibes, I feel the vibes. The topic of the day: lottery tickets are actually big prizes for government. Please tell me it isn’t so?
I was intrigued, if not a bit apprehensive about the recurring overpromotion of Mega Millions. It suddenly dawned on me that the publicity was abound like fireworks in July. The skepticism in me was flowing; my senses told me that there could be more on the canvas than was being divulged.
Then, perhaps by chance, I stumbled upon a juicy opinion piece that was freshly published. Ahhh, to my surprise, my intuition was right again. The clinching title: Lottery buyers line up to pay a tax. I wasn’t the only skeptic. There were well over 1,000 comments on the page and over 2,000 likes.
The incredibly talented author filled in the gaps of my preposterous theory for me. If permitted to do so, I will add his quote to this post:
State lotteries only pay out an average of 60% of their gross revenues, a payout vastly inferior to those of slot machines and table games, which offer payouts in many cases above 90%….
What was that you say? State and federal governments relying on these huge profits for revenue?
Troubling to the author was the fact that a great portion of lottery ticket currency was pouring in from low-income buyers. And low-income buyers were spending most of their incomes on lottery tickets. There have been extensive studies to back up these claims.
Their odds for winning the lottery were 1 in 176 million. Gee, that’s not so bad.
So, my convoluted case is shaping. I have resolved that while there are winners who do win really large sums of money, lottery tickets are no more than a tax. If one could see through the cloaked objective, then one would discover that people are literally lining up in droves to pay more taxes. Thus, further lining state coffers.
The author raises another valid point. Winners of huge sums are “subject to a 25% federal withholding and state withholding rates as high as 12%.”
I also watched a PBS Frontline episode, Betting On The Lottery, which aired on November 6th, 1990. This enlightening episode deals with the Illinois state lottery. A bit outdated in some respects, but the steam is still there.
