I thank you, too
I'm not sure where the Chron found new bidness columnist Loren Steffy, but so far I've generally enjoyed his work. I particularly like today's column about the lottery, written as the record jackpot is luring
suckers hopefuls from out of state.
I want to thank all of you who helped pay my taxes during the past week.
Last Friday alone, more than 400,000 of you were chipping in each hour, and I really appreciate it.
You probably didn't realize the favor you were doing me, of course. You were out buying up lottery tickets, chasing a jackpot that, with no winner last weekend, has hit $120 million.
There's another drawing tonight, and if no one claims a prize, I win again.
He goes on to run the numbers and explain why the lottery is such a loser's bet. If you don't like it when people tell you the odds, consider this:
We feed the beast in the name of public service. The lottery, after all, is a strange animal. It's administered by a state agency, which takes 7 cents of every dollar you spend on the lottery to pay for itself. It gives 5 more cents to the retailers who sell the tickets.
Fifty-eight cents goes to fund prizes, the carrot used to keep everyone lining up at the convenience store. And 30 cents goes to the state.
If the lottery were simply "raising money" for schools, 30 cents on the dollar would be a lousy margin.
The Better Business Bureau, for example, says fund-raisers should keep their administrative expenses to less than 35 percent of total revenue. Counting prize money and administrative costs, the lottery's operating costs run at 70 percent.
Keep that in mind if the Governor's infernal slot-machine-as-school-funding plan rears its ugly head again.
Posted by Charles Kuffner on June 16, 2004 to Other punditry
This is why governments keep lotteries illegal outside of government itself.
Any reputable, solvent private company could administer a lottery that paid out 90 cents on the dollar, with 10 percent going to expenses and profits. Government lotteries would be out of business.
By keeping a monopoly on a particular type of gambling, they can keep the odds artifically crappy and not lose too many customers. If Lottery Business A pays out 58 cents on the dollar and Lottery Business B pays out (say) 80 cents on the dollar, though both are sucker bets, which is *less* of a sucker bet?
I think it's funny that lottery commercials -- pretty much everywhere, not just Texas -- tempt people with riches and then warn people to "play responsibly." Many people who can barely pay the rent are some of the lottery's biggest "customers," and for these folks, "playing responsibly" would mean not playing it at all. yet there's little doubt that these ads are largely intended for them, every bit as much as Joe Camel ads were aimed at getting kids to smoke (IMO) no matter how much the tobacco lobby denied it.
But yeah, I think it's great that all these folks out of state are crossing the border and playing. If non-Texans want to fund Texas government, I'm all for it. They can fund it all, for all I care. :-)