California Lottery commercials
I've noticed a resurgence of commercials on the radio promoting the California Lottery, and they have succeeded in inciting me to write a blog post about them. You see, even in today's age a monumental government corruption, socialists running the country (note: those first two may well be related), massive government budget deficits with no fiscal responsibility whatsoever, scandals, bailouts, payoffs, fraudulent bankruptcies, and all the other horrible self-imposed disasters our country is suffering through, the California Lottery still finds a way to stand out to me.
First, for any uninformed readers, lets catch up on how the California Lottery works. First, and this is an optional step as far as I can tell, suckers buy tickets. Usually these people are poor, sometimes on welfare, and usually receiving some sort of state subsidization (eg: paying less taxes through a "progressive" scale). According to the 2008 survey, about 54% of the people who played the lottery had a household income over $20,000... which means about 50% didn't. BTW, the lottery site has all the gory details about the financial information.
Next, we subtract out the operating expenses, which amount to roughly 12% of the total gross income (which is roughly $3 billion annually). The prizes account for another 53% ish, and the school administrators and bureaucracy absorb about 35% (as required by the law which established the lottery). By most accounts, the lottery itself is financially solvent, contributing money to education, and not a drain on the state... so why am I disgusted when I hear the commercials?
To understand that, you have to take a closer look at the overall picture. Consider that, for a family of four in California, the poverty level (ie: eligible for food stamps, welfare, etc.) is around $27,000 annual income. That means if you make less than that, you are directly being supported by the state: that is, my money is going directly to you. Not that that's necessarily a bad thing; there's some value in supporting people's basic needs, and I don't really resent a portion of the taxes I pay being used for that purpose. As long as my money is not going to gambling, or booze, or drugs, or other similar things, providing basic support is probably worthwhile.
Now enter the lottery. If the distribution of people gambling in the lottery is roughly proportional to the money spent (it's probably weighted toward people with less income, but we'll be conservative), then over 50% of the gross revenue is collected from people my tax money is already directly subsidizing. That means California is taking my money, and giving it to people to spend on gambling. Moreover, if that's not bad enough, a large portion of the money collected after winnings are paid out are going just to administration of the lottery itself (roughly 25% of net income after payouts). So not only is my money supporting gambling additions and get-rich-quick schemes, it's also being wasted to support a bloated bureaucracy.
But wait, that's not all. Apparently, we can waste even more money in this vicious cycle if we promote the lottery, and try to get more gullible people to gamble while the economy is bad. So not only are we spending money on commercials and promotions, we're trying to suck even more money away from Californians during the recession, so they will be in even more need of government subsidies, support, bailouts, and welfare! And for what? So we can take more taxpayer money, and effectively divide it between the lottery administration getting 25% (which costs roughly $400 million annually), and the education system getting 75% (which is already bloated and corrupt beyond redemption), which is already the recipient of an enormous amount of money annually, which has helped them reach almost absolute bottom in effectiveness.
The California Lottery is a grotesque bloated scam created to enrich the education unions and administration at the expense of the taxpayer, in one of the most insidious and successful socialist abortions California's malignant government has ever produced. Every commercial is a reinforcement of our abject failure, as a society, to weed out the influence of special interest corruption and waste, wrapped up in a jingle. It's nauseating and sad.
First, for any uninformed readers, lets catch up on how the California Lottery works. First, and this is an optional step as far as I can tell, suckers buy tickets. Usually these people are poor, sometimes on welfare, and usually receiving some sort of state subsidization (eg: paying less taxes through a "progressive" scale). According to the 2008 survey, about 54% of the people who played the lottery had a household income over $20,000... which means about 50% didn't. BTW, the lottery site has all the gory details about the financial information.
Next, we subtract out the operating expenses, which amount to roughly 12% of the total gross income (which is roughly $3 billion annually). The prizes account for another 53% ish, and the school administrators and bureaucracy absorb about 35% (as required by the law which established the lottery). By most accounts, the lottery itself is financially solvent, contributing money to education, and not a drain on the state... so why am I disgusted when I hear the commercials?
To understand that, you have to take a closer look at the overall picture. Consider that, for a family of four in California, the poverty level (ie: eligible for food stamps, welfare, etc.) is around $27,000 annual income. That means if you make less than that, you are directly being supported by the state: that is, my money is going directly to you. Not that that's necessarily a bad thing; there's some value in supporting people's basic needs, and I don't really resent a portion of the taxes I pay being used for that purpose. As long as my money is not going to gambling, or booze, or drugs, or other similar things, providing basic support is probably worthwhile.
Now enter the lottery. If the distribution of people gambling in the lottery is roughly proportional to the money spent (it's probably weighted toward people with less income, but we'll be conservative), then over 50% of the gross revenue is collected from people my tax money is already directly subsidizing. That means California is taking my money, and giving it to people to spend on gambling. Moreover, if that's not bad enough, a large portion of the money collected after winnings are paid out are going just to administration of the lottery itself (roughly 25% of net income after payouts). So not only is my money supporting gambling additions and get-rich-quick schemes, it's also being wasted to support a bloated bureaucracy.
But wait, that's not all. Apparently, we can waste even more money in this vicious cycle if we promote the lottery, and try to get more gullible people to gamble while the economy is bad. So not only are we spending money on commercials and promotions, we're trying to suck even more money away from Californians during the recession, so they will be in even more need of government subsidies, support, bailouts, and welfare! And for what? So we can take more taxpayer money, and effectively divide it between the lottery administration getting 25% (which costs roughly $400 million annually), and the education system getting 75% (which is already bloated and corrupt beyond redemption), which is already the recipient of an enormous amount of money annually, which has helped them reach almost absolute bottom in effectiveness.
The California Lottery is a grotesque bloated scam created to enrich the education unions and administration at the expense of the taxpayer, in one of the most insidious and successful socialist abortions California's malignant government has ever produced. Every commercial is a reinforcement of our abject failure, as a society, to weed out the influence of special interest corruption and waste, wrapped up in a jingle. It's nauseating and sad.
Well said Nick. My brother and I would always joke here in San Diego when we heard one of those commercials that the Lottery was a tax on the poor that as you say here we as taxpayers were subsidizing. If you want to know just how incredbily fricked up this states governing regime is look no farther than the recent ballot initiatives.....remember that one of them 'borrowed' against the lottery? Worse yet it borrowed against future lottery dollars to fund today's programs without taking into account that the revenue stream for the lotter will most likely go down in the recession......
ReplyDeleteMaybe this is the positive way to think about it: People are going to make bad decisions and gamble no matter what. So at least some money we spend to help people with basic needs will get wasted. In the case of the state lottery, though, the proceeds go to the state government. It’s not like the lottery uses tax dollars to promote gambling and run its operation. Someone’s going to be out there promoting gambling and profiting from it. In this case it’s the state.
ReplyDeleteIt would be logical to expand this model to prostitution and all recreational drugs. Someone’s going to be out there promoting and profiting these things no matter what we do. We already have police to keep people from cutting in on their cartel. If the government did a very good job promoting all vices, maybe it could collect most of its revenue that way so taxes would be voluntary.
CJ: Your point might be good, except that California does promote the lottery, and encourage more gambling, and is trying to get permission to expand the prizes to attract more gambling. Moreover, the majority of the money going into the lottery is effectively tax dollars through subsidization programs (effectively all of it other than the prizes are paid out, as I documented), so tax dollars are directly funding promoting gambling and running the lottery.
ReplyDeleteI don't strongly disagree with the government being a competitor for vice industries, but because of the tax money getting funneled into it, the lottery is asinine. If you cut out all the support programs, and/or prevented anyone on state support from participating, I would have much less of a problem with things like the lottery. As they are currently structured, though, they are basically an extra tax being collected to promote gambling and bureaucratic bloat, and I'd strongly prefer not to have my money taken to support those two causes.
LCR:
It's even worse than that... they also want to spend more money on the lottery to try to scale up operations, so that they can make the revenue numbers projected which they are trying to "borrow against". Apparently not only can we continue to get the same revenue in a recession, but we can still grow the gambling enterprise with more marketing, prizes, and outlay expenditures.
I don't strongly disagree with the government being a competitor for vice industries, but because of the tax money getting funneled into it, the lottery is asinine.Yes. My comments were mainly tongue-in-cheek. It’s clearly undesirable to have the state promoting something that’s bad for people. I was just trying to look on the bright side saying that if the gov’t didn’t provide gambling someone else would.
ReplyDeleteIdeally, government would do a good enough job that people would be happy to write big enough checks for their quarterlies to cover gov’t expenditures w/o lottery, and people would feel like they’re getting a safe place to live and do business in exchange for those taxes.
I actually do feel that way about Wisconsin, although there is certainly room for improvement.
Nick - I altered my post over at LCR to reflect your correct comment on the power to spend, legislative vs executive branch.... the overarching point of my story (was a little hastily written), still intact however....
ReplyDeleteOKAY I'M NOT GOIN TO PRETEND TO EVEN KNOW ABOUT ALL THIS LEGISLATIVE STUFF, BUT AS A MOTHER WHO HAS A SON IN PUBLIC SCHOOLS, AND SEEING HOW HIS TEACHER BEGS THE PARENTS FOR THINGS LIKE POST ITS AND GLUE STICKS, MY ? IS, ISN'T THE LOTTERY SUPPOSED TO BE COVERING THESE THINGS, THINGS AS BASIC AS WRITING PAPER PENCILS AND TEXTBOOKS? WHAT'S GOING ON IN SACREMENTO?
ReplyDelete