New Mexico Lottery still looking for $93 million Powerball winnerPrevious TopicNext Topic

Seems to me, in all fairness to all parties, that Lotteries SHOULD be tax free or the ACTUAL amount won should be expressed accurately. Now, I don't agree or disagree with anyone, I just think it should be done differently and I like the fact that they are tax free in Europe, Aussie, UK, etc... Why don't we do that in the USA, the lotteries certainly make enough money. Tax-free lotteries would only increase participation, thereby increasing profit, I think we all agree on that.

I don't see the US lotteries ever doing away with taxes on lottery winners (or anything else, once they've got a lock on it).

To be honest, I don't even object to the first-crack-out-of-the-box jackpot being, what? $5 million and some change, before taxes?  Maybe $3 million after taxes.

What I object to is the fact that those billboards advertise something that isn't so.  I believe they do it because they know if they announced in billboard letters how much they're actually giving away, people would begin to ask themselves where all the rest of that money is actually going.

Some of it's going to fund education, as they claim.  But since the lottery is a quasi-public institution, the 'administrative costs' such as salaries of employees ought to be public information.  Just as  it is with State employees.

Those lottery operations are an ocean of money all the way up and down the pike.  Players know they don't stand a lot of likelihood of taking a swim in it, but they buy tickets thinking there's at least a remote chance that if they get lucky there's a  significant piece there for them.  Lottery officials (smile slyly and) help them to believe that.

But after the wink and the nod, all the while they're calculatedly and deliberately setting up a system where there are no winners except themselves with a smoke and mirrors routine involving annuities created from dollars they aren't taking from the actual ticket sales, but  rather from bets on their own investments.

They're promising winners money that doesn't exist while pocketing the bulk of the money that does exist to pay their own salaries and dropping a pittance into the State Education Funds.

Jack

Sorry to keep disagreeing, but since the state lottery actually does give away the amount on the billboard, I don't any reason why they have to advertise the worst-case scenario.

Just like my employment example, where an employer is not going to try to lure a candidate to a CEO position by saying, "Come to my company, where the salary drops by 50% after you subtract out the taxes and benefit contributions!  You may think you're going to get $200,000, but when you take out all the taxes, we're actually only going to give you $100,000!  What a deal!!"

Like I have said multiple times, I wish that there was no tax on lottery prizes, but in the United States, the reality of the situation is that the government would never approve a government-run lottery unless they make some money off of it.  And since the STATES run the lotteries (not the Federal gov't), there needs to be some mechanism for the Feds to get a cut of the money, and that naturally comes out of the prizes.

If you want to know exactly what you're going to receive after taxes, go to the Jackpot Analysis page at USA Mega, not the billboards.

I have to agree with you Todd.  Before the whole Cash-Option choice came about all prizes paid were annuitized over so many years.  So the jackpot was worth the cash value plus all the interest.  This is what lotteries have been doing for the life of them.  There is nothing wrong with this.  Acutally I don't see why lotteries invest the money for annuities in such low interest bearing bonds.  They us a ~1.6% right now when you can get government securites that average over 4%.  Now that would increase the jackpot by almost double.  As long as the lotteries continue to give us Cash Values of the jackpots they can advertise whatever they want...since I will be taking the cash value anyway.

Brad

Acutally I don't see why lotteries invest the money for annuities in such low interest bearing bonds.  They us a ~1.6% right now when you can get government securites that average over 4%. 

Prosecution rests.

Jack

I agree Todd's employment scenerio, however this is different. You cannot write off 3 million lost on a game whereas you can write off all the expenses of being a CEO. I mean there is an actual process and a way to recover some of that. There really is no way for anyone to recover this money, I think that's what makes winning the jackpot very unique regarding taxation. I think that is whhy other countries don't tax it because it's prize money, not earned income. Yes, before you say it, you might be able to write off some of it but it will be too little to mean much of anything. I think Todd, even you would agree while is not wrong the way they announce the amounts it would be nice, it would be great rather if it was set-up like other countries and won that amount minus nothing. You win the face value amount, that would be nice.

Also look at what Powerball is doing.  They are setting up their annuitized jackpot in a way where you get more money in the later years then in the earlier years...just a way to increase the advertised jackpot more and faster.  If you keep more money in the securities for more years you will earn more interest.  This is how they will be able to start it at $15m and watch how much the jackpots increase.

Brad

This is how they will be able to start it at $15m and watch how much the jackpots increase.

Or, if you prefer, this is how they'll be able to start at $7 million dollars used from ticket sales to pay off the winners who don't care about having their money invested at a low interest rate by people they don't know, and have no reason to trust to act in their best interests.

The amount of money they're willing to pay out immediately to winners, after they've increased the odds against the players, will increase on the initial jackpot from roughly $5 million to $roughly 7 million.

That's the actual amount of existing dollars from the pool created by ticket sales that they're willing to part with for the people this entire lottery structure is all about:  the players.

On the other hand, they're perfectly willing to invest the money at whatever interest rate they can get, claim it's invested at the lowest rate they can find, and pay out the lower rate to the person who's willing to accept it because it represents the actual amount they were promised on the billboards.

More skim for whomever's holding that money in trust.  Good to have such folks looking out for our interests for us.  Good, the government 'allowing us' the freedom to gamble within their monopoly.

Jack

.8/13TH...4:30PM EST

      HAPPY SATURDAY....8/13TH.......TO ALL MY FELLOW HAPPY GAMBLERS.....4:30pm est

"MPJO"....I TOTALLY AGREE WITH YOUR STATEMENT....about when the winner "should "recv the money as opposed to when the winner "actually" recvs his winning here in the States...it's unfair but as RIP SNORTER has alreadly carefully explained, it comes down to the States holding on to earn interest for themselves.  After all, it doesn't take 5 mins to get Legal Reps to handle everything for you, and in this age of "HIGH TECH ELECTRONIC DEPOSITS"..It's takes only seconds to "wire the funds" to your checking or saving account. You can sit down later with your Reps and create Trust Funds, Tax Havens....ect... Also, "RIP SNORTER" I loved your comment about the "MAFIA" ......versus "STATE OFFICIALS"...although I cannot personally speak ill of the State Officials as I have not seen anything here in Maryland or the District of Columbia to complain about. CANADIANS are lucky to get their money on the day they claim it. If I ever win, I will agree to do a News Conference, only on the "very day" they wire the funds to my Bank Account....

Whether or not the USA is the best country in the world, Canada seems to do some things much better than here, like not taxing lottery winnings.

That's right, they just tax everything else.

HAPPY SATURDAY...TO "CASH ONLY" & ALL MY FELLOW HAPPY GAMBLERS.....

EXCELLENT POINT.....regarding the Canadian Government's "NOT TAXING LOTTERY WINNINGS"

But we all know that the American Government is very greedy.....and taxes everything it can...even  in "DEATH"....you cannot escape the greed of this Government...The only thing they haven't found a way to tax is:THE INTERNET.....(I better not say that toooo loudddd)hehehehhehe

BTW.......CASH ONLY.....what would you propose to do to keep Connecticut in the "Powerball"??