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How lottery tickets are helping states' budgets

Insider BuzzInsider Buzz: How lottery tickets are helping states' budgets
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The scores of losing players in this week's $425 million Powerball jackpot did more than take an extremely long shot at getting rich. Their ticket purchases also helped fund a small but increasingly important part of their states' budgets.

Changes in the nationwide Powerball and Mega Millions games have led to some of the world's largest jackpots in the last two years, boosting player interest and sales. Fueled by the growth of those games and the steady expansion of other offerings, many state lotteries last year reported record revenues and transfers to the state budgets and programs they helped fund.

For every $2 ticket, 50 cents or more might end up paying for police officers in Massachusetts, services for the elderly in Pennsylvania, or education in rural school districts in Idaho, lottery directors say.

In all, about $20 billion out of the roughly $70 billion in overall annual lottery revenues is used by states after prize money, retailer commissions, advertising and administrative expenses are taken out. Most states target their lottery revenue to specific causes, with education being the most popular.

Texas Lottery Commission executive director Gary Grief said Powerball sales in his state multiply several times as the jackpots rise, from a normal range of about $3 million per week all the way up to 10 or 15 times that amount. That means millions more dollars for public education in Texas, the lottery's beneficiary, he said.

"That's a very small piece of a big pie, but every dollar counts," he said. "It helps alleviate the drain on other revenue sources for state government."

Overall, state budget experts say lottery revenue typically represents a single-digit percentage of overall state budgets. That means a momentary sales frenzy for Powerball has little impact in the big picture, other than helping the lottery become a dependable and incrementally growing funding source.

"In the big scheme of things, we have a $16 billion budget in Oregon," said that state's chief financial officer, George Naughton. "The individual sales, the individual jackpots, do have an upward tick but it's probably not going to change from a revenue perspective the decisions that elected officials are going to make down the road."

Naughton said the lottery generates roughly $1 billion over two years to help fund education and other programs.

Increases in lottery revenues have helped maintain services in recent years during a tough time for state budgets, said David Gale, executive director of the North American Association of State and Provincial Lotteries. He said overall lottery revenues likely increased one or two percent in the budget year that ended last July, above the $68.7 billion of the previous year.

In Massachusetts, cities and towns benefit when sales spike because lottery revenues are among the state's "single largest source of unrestricted local aid," said Beth Bresnahan, executive director of the state's lottery. The money is divvied up based on a formula set by state lawmakers and used for everything from police officers to transportation, she said.

She said that during a December frenzy over the last large Mega Millions jackpot, retailers were selling $11,000 in tickets per minute — "and this was in a statewide snow emergency."

"When we see a surge in sales, it does impact the bottom line," she said, "regardless of the smaller amount of overall play it represents in our portfolio."

AP

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16 comments. Last comment 8 months ago by Gleno.
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mypiemaster's avatar - peace
He who dies with the most toys WINS!!!.

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Posted: February 24, 2014, 8:51 am - IP Logged

Only when it is used for what it was intended for. It does not always work out that way.

Seekand ye shall find -Matt. 7:7 ...Ask and ye shall receive -John 16:24 ...Give and it shall be given unto you -Luke 6:38 ...Be careful what you ask for!!! -Mypiemaster 1:1

Having Money Solves Problems That Not Having Money Creates Yes Nod ****John Carlton****

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    United States
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    Posted: February 24, 2014, 10:07 am - IP Logged

    Only when it is used for what it was intended for. It does not always work out that way.

    Arizona example:

    http://www.azcentral.com/news/politics/articles/20131130arizona-lottery-revenue-funds.html

      CDanaT's avatar - tiger avatar_04_hd_pictures_169016.jpg
      TX
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      January 4, 2012
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      Posted: February 24, 2014, 10:09 am - IP Logged

      I am glad the lottery can provide some of the extras the state needs, but when a powerball or mm creates such a frenzy as it has over the last couple of years. Why are states constantly going into greater debt ?? I better hurry up and win one of these jackpots soon, just incase they get other ideas about taking more than they do.

      Yes Nod

        Littleoldlady's avatar - basket
        Clarksville
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        Posted: February 24, 2014, 10:42 am - IP Logged

        very interesting and enlightening article.  It is sad what they are doing.

        If you know your number is going to hit, have patience and then KILL IT!

        You never know when you will get another hit.

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          New Member

          United States
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          February 1, 2013
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          Posted: February 24, 2014, 11:50 am - IP Logged

          Well needed fund in some states. The trick is to make sure it goes to where it's needed the most and not get wasted by incompetent officials.

            helpmewin's avatar - dandy
            u$a
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            Posted: February 24, 2014, 12:48 pm - IP Logged

            Great a Win Win SituationParty

                             

              dallascowboyfan's avatar - tiana the-princess-and-the-frog.jpg
              Oklahoma
              United States
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              Posted: February 25, 2014, 11:40 am - IP Logged

              Oklahoma Lottery Commission says its going to the schools but I just read yesterday that our 3rd graders can't read at their levels. So where is the money going in Oklahoma Bang Head

              I Love Pink & Green 1908

                sully16's avatar - sharan
                Listens to the wind
                Michigan
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                Posted: February 26, 2014, 7:52 am - IP Logged

                Oklahoma Lottery Commission says its going to the schools but I just read yesterday that our 3rd graders can't read at their levels. So where is the money going in Oklahoma Bang Head

                They just keep throwing money at education, if the parents are not involved, all the money in the world cannot make kids smarter.

                There's only one US Flag

                  maringoman's avatar - kobold
                  Massachusetts
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                  Posted: February 26, 2014, 6:26 pm - IP Logged

                  I'm glad to have helped. Can they help mend the holes that lottery has burnt through my pockets? What?

                  It's a futile effort.

                    Astekblue's avatar - Tarlor
                    Kentucky
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                    Posted: February 27, 2014, 3:41 pm - IP Logged

                    very interesting and enlightening article.  It is sad what they are doing.

                    Little   

                     

                    I  read  it  yesterday  in  the  newspaper   ( not   sure  ,  but   may  still  be  able  to  read  on  line  ) 

                     

                    Lexington   Kentucky        Herald-Leader    newspaper     yesterday    (  front  page )

                     

                    " College   aid   sapped   by   diversion    of    lottery     funds  " 

                     

                    Need-Based  Support   Especially    Shorted

                     

                    Some  Key points in article

                     

                    Diverted  more  than  100  million in  lottery  proceeds   away  from  financial  aid   programs for college students  since  2009  ,   and  might  take  an  additional   76  million  over the next two  years

                     

                    Despite the fact that the General  Assembly  in  1998   decided  that   100   %   of  lottery  proceeds  would  go  to  education ,  with most of the money   aimed  at  helping  students pay for  college

                     

                    Its   part  of  why  the  state   denied   need-based  aid   to    86,000    qualified  students   in   2013

                     

                    Source  :   Parts  above   is    from  a  well  respected  newspaper in  Kentucky  (  name  mentioned  above  )

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                      Windermere, FL/Franklin, TN
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                      Posted: February 27, 2014, 4:11 pm - IP Logged

                      Oklahoma Lottery Commission says its going to the schools but I just read yesterday that our 3rd graders can't read at their levels. So where is the money going in Oklahoma Bang Head

                      Unfortunately the money is going towards the teachers salaries, pensions and unions. These corrupt officials couldn't care less about our children but they put on a convincing face when claiming the money is to benefit the schools. Many states allocate lottery money towards these "Educational funds" and less than 10% even make it into the school system, the rest of the money gets thrown at various pet projects and departments throughout the state. 

                      Overall the Federal/state Government throws more funding toward public education than any other developed nation yet these kids rank near the bottom in terms of math and science skills.

                      ** Some people fulfill their dreams by receiving entitlements from the Government while others wake up and work hard for it! **

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                        Bondi Junction
                        Australia
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                        Posted: February 27, 2014, 9:40 pm - IP Logged

                        They forecast that two years from now, UK Chancellor George Osborne will be taking £1billion a year in tax from lottery tickets – almost double the State’s share of the takings before the onset of the economic downturn.

                        Duty paid on National Lottery tickets runs at 12 per cent, and from the game’s beginnings in 1994 until 2007 the amount paid to the Treasury each year ran at between £500million and £600million.

                        But the Government’s take has been rising steeply in line with tickets since the onset of the downturn, the figures show. It topped £800million last year and will hit £1billion in two years’ time, they indicated.

                        We all get a lot out of lotteries!

                          Littleoldlady's avatar - basket
                          Clarksville
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                          Posted: February 27, 2014, 11:19 pm - IP Logged

                          Unfortunately the money is going towards the teachers salaries, pensions and unions. These corrupt officials couldn't care less about our children but they put on a convincing face when claiming the money is to benefit the schools. Many states allocate lottery money towards these "Educational funds" and less than 10% even make it into the school system, the rest of the money gets thrown at various pet projects and departments throughout the state. 

                          Overall the Federal/state Government throws more funding toward public education than any other developed nation yet these kids rank near the bottom in terms of math and science skills.

                          Sorry, it is not going toward teacher salaries, pensions or their union.  I know that for a FACT!

                          If you know your number is going to hit, have patience and then KILL IT!

                          You never know when you will get another hit.

                            Drenick1's avatar - villiarna
                            USA
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                            February 25, 2014
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                            Posted: February 28, 2014, 2:02 pm - IP Logged

                            Lottery money is indeed going towards states budget and not the school system as most have claimed and advertised.