'A delicate balance'
In the fiscal year ended June 30, the Georgia lottery gave 25.3% of revenue, or $846.1 million, to education. The percentage of proceeds awarded isn't as important as the dollar amount, which has been growing, said Tandi Reddick, the game's media-relations manager in Atlanta. In 1997, the lottery gave 35% of revenue, or $581 million, she said in an email.
The Georgia lottery had record sales in the week ended Feb. 11, taking in $101.2 million and surpassing a 2007 record by more than $5 million, said Reddick, who declined to predict education funding levels for this year or the future.
"There is a delicate balance that must be achieved between prizes paid and profits returned," Reddick said. "If we believed for a moment that the lottery could increase the annual dollar amount returned to education by reducing prize payouts, thereby increasing the percentage return to the HOPE scholarship and pre-K programs, we would not hesitate to do it."
Some 29 states expect budget deficits of $47 billion for the fiscal year that begins July 1, according to the Center on Budget and Policy Priorities, a Washington-based nonprofit group that researches issues affecting lower-income Americans.
The drive to collect more from numbers games paid off in the year ended June 30, 2011, with 26 states reporting higher revenue than the year before, according to La Fleur's, a lottery research firm in Rockville, Md. Total sales increased by 3% to $56 billion.
The National Gambling Impact Study Commission, in a 1999 report, found that lotteries were the most widespread form of gambling in the United States -- and the type with the longest odds.
Unlike Georgia, with its dedicated stream to education, Massachusetts returns 95% of lottery revenue to its municipalities to do with as they wish: $802.2 million for the fiscal year that ended June 30, 2011. The rest goes to gambling-addiction programs, cultural groups and community services, said Paul Sternburg, the executive director of that state's lottery.
"We paid over $3.1 billion in prizes last year, so there are a lot of winners out there," Sternburg said in a telephone interview. "Massachusetts has always had the highest payout. I don't think we can go any higher. If we went any higher, we'd be hurting our net profits."
Competition from casinos
In January 2011, Massachusetts lottery officials examined the "portfolio mix," particularly the instant scratch-off tickets priced at $1, $2, $5, $10 and $20, Sternburg said from his office in Braintree, Mass.
"Our tickets -- they weren't popping out," he said. "We went back to basics: Make the tickets more attractive. You can see, when our first tickets went on sale in April, it's been going up ever since."
Gov. Deval Patrick of Massachusetts signed a law last year allowing casino resorts. Sternburg said they'll be open in two to three years and will take a chunk of lottery cash, at least temporarily.
"At that point we're expecting between a 3% and 10% hit in revenue," Sternburg said. "You have to change your portfolio, come up with new products."
A study commissioned by the Georgia lottery last year found that three casinos, if approved, could draw about $1 billion in revenue. With no casinos operating now, the lottery's focus is on "fresh and exciting" games for players and the possibility of a national game, Reddick said.
"The biggest challenge facing the Georgia lottery is finding ways to grow a mature lottery," Reddick said.
More from Bloomberg:
VIDEO ON MSN MONEY
Really Squiggy? Some of the most intelligent people the world has ever known came from impoverished backgrounds. Conversely there are many very intelligent people who choose to live in poverty because they lack the motivation to do what it takes to join mainstream society. Intelligence does not always equate to income level. For poor people lotteries and gambling equate to hope. People with higher incomes don't necessarily need the same kind of hope to better themselves. However, plenty of higher income folks gamble everyday...in the stockmarket, investing in a business or even at casinos. Does that make these higher income people stupid as well?
There are many reasons people are poor...laziness, mental/physical illness, low intelligence, lack of economic opportunity, bad luck, "being born in poverty but not knowing a better way of life", and yes, even as a result of making poor decisions (keep in mind that intelligent people also make poor decisions).
I would agree that welfare in the form practiced in this country is not a glowing success, but to say that ending welfare will decrease poverty is completely ridiculous. More likely, crime will increase proportionately. Education and opportunity are the keys to ending welfare and ultimately poverty.
My husband and I took a financial management class and one of the things they said was not to waste your money on the lottery, that you have a better chance of being struck by lightening in your lifetime than of winning the lottery. He also said "Rich people don't buy lottery tickets." Incidentally, we were only making about $30,000 a year at the time so it's not like we were in the "rich people" category. The class was a three month session and was offered at a local church. The cost was $100. Our lives have significantly changed since we started living within our means and being smart about spending and saving our money. After all, if you can't manage a small amount, why do you think you will be able to manage a large amount? How about the idea of educating people about budgeting and managing their money instead of throwing a pity party about how poor they are and "deciding" for them what they should and shouldn't spend their money on?
Georgia lottery facing a 300 million deficit, while players contribute 5 BILLION in revenue?
Georgians, as well as every state that offers a lottery should be demanding a microscopic auditing of the lottery commission.
I have bought lottery tickets, win some, lose some, but never, in all of my years has there been anyone there, with a gun against me head making me buy them.
Boo hoo if you can't afford it. If you can't,. don't. Case solved, next problem Sherlock.
It is a shame that our governing leaders endorse gambling. It is nothing more than a numbers racket, that used to be illegal and run by crooks. Perhaps, it still is.
The government profits off of the despair of poor people, who have nothing left of the american dream but their desperate hopes of winning a lottery.
It is, and will always be nothing more to me, than a voluntary tax system, for people who are bad at math. One that will always entice the poorest to play the most, in hopes of achieving the alusive american dream. Financial security.
Just a sign of the mentality of our governing leaders incompetant, unaccountable, and illogical solutions to problems, that only leads to worse problems. Well, at least for the poorest. Don't you think they would have known that the poorest citizens with the least to spend would play the most? Don't you think that somewhere in their endless studies of human behavior, and the history of organized crime, they may have noticed this fact?
Even Al Capone, who was aware of this fact, never saw jail time for any crimes, only tax evasion.
It certainly paints a poor picture of our governors.
They don't prosecute wealthy criminals(unless they are forced to), yet may still incarcerate them for not giving them their share of the gains? I think this explains much of the corruption within our government. They seem to endorse unfair practices, and allow the richest to steal from the poorest, as long as they prosper too.
Organized crime learned how to pay the ones who make the laws, to look the other way.
I find the rather negative tone of this article to be somewhat regressive and offensive. It implies that lotteries are "taking" from the poor. That is the same erroneous logic that caused gambling to be prohibited for so long in this country. Lotteries and the gaming industry in general do not "take" anything from their players. It is all "given" voluntarily and for those who say they are being swindled nothing could be farther from the truth because in every case the odds of winning are clearly published so there is no intent to defarud whatsoever.
If gaming were set up to be a charity there would be no criticism of it at all but then no one would contribute to it either. If people were taxed for this revenue the outcry would be deafening. However lotteries in their present form, since there is the minutest chance that you might get something in return, are wildly popular and money flows into the things needed the most such as education and environmental concerns for a given state. So please don't start that old crapolla about how it is "taking from the poor."
My wife and I were just talking last night about how awesome it is to live in Georgia with two kids vs. California where we moved from 9 years ago.
What other state has a free Pre-K program and will fund half of your college costs at an in-state school if you maintain a good GPA in HS & College? The Zell Miller scholarship will now cover full cost of college for the highest achieving students.
You can disparage Georgia all you want, but if the alternative would be to have those funds going to illegal gambling and hard working students racking up as much debt as those in other states, I'll take the Georgia Lottery every time.
You can think of it as a self-imposed Ignorance Tax. It transfers money voluntarily from someone who wants to gamble on the chance for instant wealth against impossibly long odds to adherents of the incremental, disciplined effort of hard work and scholarship as a path toward sustained success. Given that the latter will likely end up being taxed in the highest bracket for an amount that far exceeds their cost of tuiton, it is likely a sound investment.
In the meantime, you can delude yourself that the lowest income participants would have used the same money for improved nutrition, better living conditions or an investment in education for their family if the lottery didn't exist, but it's more likely it would have gone to drugs, alcohol or illegal gambling instead.
As Van Jones likes to say; "Don't compare me to the Almighty. Compare me to the alternative."
"You're taking from those with few means and helping those with more means," Charles Clotfelter, a Duke University economics professor, said from Durham, N.C. "To link that tax revenue to a benefit that goes largely to middle-and upper-class citizens is a little stunning,"
NO ONE IS FORCED TO PLAY THE LOTTERY.
I don't want to play the lottery, I want to run one!!!
The house keeps 35%. If I sell a hundred people one dollar tickets, keep 35 bucks, pay out $50, $10, and $5 for winnings I have 35 bucks, three winners, and 97 losers. Scale that up tp 1000 people, I have 350, a 500 dollar winner, a 100 dollar winner, and a 50 dollar winner - and 997 people are losers.
Copyright © 2013 Microsoft. All rights reserved.
RECENT ARTICLES ON PERSONAL FINANCE
Joe Cantrell says he faces charges after trying to take advantage of the retailer's policy.