State Lottery: Pro/Con & Why

[Cougz]

I'm interested in knowing where everyone stands concerning the state lottery and is it living up to the "promises"?

[Mmgord77]

Well, I studied this in a class called "Game Theory" in college. It's an upper level Economics class that deals with certain situations and how they work. The lottery was one of the lessons. My teacher, who is admittedly extremely liberal, was 110% against having a lottery. Reason being, in every state that has had one long enough to see effects happen (about 5 years) there has been a larger than average increase in poverty, bankruptcy, and amount of people on welfare. Those are the normal effects on normal people. It happened in every state that has had a lottery, without exception. Also, as far as its intended use (education)... It works exactly according to plan for about 2 - 3 years. Education money skyrockets for those years. The problem then happens with legislation, not the lottery. In all states that have had it for about over 5 years, education spending has stopped increasing. The reason for this... lawmakers know that X,XXX,XXX amount of $$$$$$$$ will come in each year due to the lottery. Therefore, they stop the increase on the the education budget and start moving the normal money they would have spent to other areas of interest. Case in point, last year and this year, the State of Texas Education dept. has been in a budget crisis, especially in the big cities. The reason for this, their education budget has increased much less than normal due to legislators relying on the lottery money they recieve to subsidise the Education Fund, instead of its original purpose of being extra on top of normal education budgets.

So, to wrap of this long explaination, I believe in the next few years we will be seeing many, many adverse circumstances due to the lottery, unfortunetly. In a perfect world where everyone is responsible, it works. Unfortunetly, our world is one messed up place.

[Cougz]

Thanks for passing along that info Mmgord77, I can add my statistic that will support your post. My business has had slow, but steady growth since 2001, even through the days following 9/11. However, since the liberal changes in the gaming laws that govern the Indian Casinos,(we have two locally :( ) our business has suffered a 25% decline in gross revenue every month since. I'd estimate an additional 10% decline due to the lottery since it's inception. My delinquent accounts have doubled and a growing number of my wholesale customers are talking of closing within the next year. I know not all areas of business have been effected this adversely, but I for one have suffered loss due to the lottery and gaming.

[FR Turbo]

Hmmm... very interesting thread.

Cougz - What kind of business do you have?

[Cougz]

I have a machine and welding shop. We manufacture and fabricate parts for aircraft, marine craft, auto racing mostly along with smaller metal fabrication for restaurants, medical, etc. The largest part of our production goes to "hobby" enthusiasts, thus I personally believe why we have felt so much effect...many customers or customers of my customers are simply changing "hobbies" and have taken up gambling on the week-end versus dragging the car to the race track or boat to the lake. However, last month's p/l statement did show that the decline had somewhat leveled out. We are currently exploring new opportuinites and bringing in work from out of state. Fuel and natural gas prices have somewhat added to the decline as well.

I have no way of knowing for sure, since these figures do not have to be posted publicly, but a friend that is employed for the Chrerokee Nation and is somewhat in a position of being in the know....said he estimated that between the two casinos we have here locally, they probably gross $200,000.00 to $300,000.00 per day! That's a chunk of change out of the economy, especially when you're in business providing for people's hobbies.

[Cougz]

:soapbox:
Jackpot! That's a Good Thing, Right?
Organization Says Lottery Winners Often Squander Their Millions

By NEAL KARLINSKY, ABCNews.com

LINCOLN, Neb. (Feb. 20) - Here's a statistic for the people of Lincoln as they await news of the $365 million lottery winner: Seventy percent of those who become suddenly wealthy squander it within a few short years, according to the National Endowment for Financial Education.

About one-third of lottery winners eventually declare bankruptcy, according to the Certified Financial Planners Board of Standards.

In this college town of 230,000 people, there is plenty of conversation about who may have won the lucky ticket purchased at a Lincoln convenience store. And there are plenty of suggestions for the lucky winner.

"If I know them, I'm going to hit them up for a loan," laughs Carl Jansen over a cup of coffee.

But at the next table over, Michelle Darcy hits on the very problem that has plagued lottery winners since big jackpots were first awarded.

"I think it'd be scary to be that person," she says. "Because you've got all your friends and family coming out of the woodwork and wanting a little piece of that lottery themselves."

In fact, state lottery officials here are blunt in their advice for the state's newly minted millionaire.

"Sign the ticket, put it in a safe place, take the phone off the hook, tell as few people as possible, talk to financial person, and come tell us," says Tom Johnson of the Nebraska Lottery.


Lifetime Dreams Turn to Nightmares


Reuters ''I truly won the lottery of death, I think.''

-- William ''Bud'' Post III, whose life turned sour after he won a $16.2 million jackpot


Sources: AP, ABC News

Riches to Rags
It is advice that comes from experience. The record books are filled with previous lottery winners who've squandered their millions.

One of the saddest stories of a former winner is that of William "Bud" Post III, who died last month of respiratory failure at the age of 66.

The former Pennsylvania lottery winner called it the "lottery of death" despite his $16.2 million winnings. He used the money to start businesses with siblings -- but they all failed. His own brother was convicted of trying to kill him. His sixth wife moved out, and an on-again, off-again girlfriend successfully sued for a third of Post's winnings. At one point, Post was convicted of assault for firing a shotgun over a bill collector's head.

John Lacher, a bankruptcy lawyer who assisted Post, said he was like "The Beverly Hillbillies."

"He did everything you would expect of a guy who became a millionaire overnight," Lacher says.

A similar case comes out of New Jersey, where in the mid-'80s a woman won more than $5 million. Today, the money is gone and the former millionaire lives in a trailer.

"I won the American dream but I lost it, too," the former winner has been quoted as saying. "It was a very hard fall. It's called rock bottom."

She says some of the money was gambled away, but millions more were lost by simply never saying "no" to friends and relatives who seemed to always "have a hand out."


02-20-06 16:33 EST


Copyright 2006 ABCNEWS.com