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Current Events & Hot Topics Current Events & Hot Topics

The lottery??

Posted by on Jan. 9, 2013 at 11:50 AM
  • 18 Replies

Can someone explain how it works? I know it sounds stupid. But it seems like if our country is in a deficit shouldnt they stop paying out millions of dollars each week? 

or is that not how it works? 


im willing to admit i am ignorant. so no need to call me out on that lol. 

by on Jan. 9, 2013 at 11:50 AM
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Replies (1-10):
talia-mom
by Gold Member on Jan. 9, 2013 at 11:52 AM

How is it the government's money?   People pay for the lottery.  

illinoismommy83
by Bronze Member on Jan. 9, 2013 at 11:53 AM

The lotto is something you pay into. 

Just an example:

$10 mil gets paid in. $7 mil is won. The leftover is income for the state, the school systems, etc.

TruthSeeker.
by Milami on Jan. 9, 2013 at 11:53 AM

 People buy tickets. That is what pays the pay out money. All of the money people spend on the chance to win the entire pot. Like a raffle.

 The Government and state also make Lots and Lots of money via taxes off of those Lottery winners so it actually helps the deficit.

jehosoba84
by Jenn on Jan. 9, 2013 at 11:54 AM

 

Quoting talia-mom:

How is it the government's money?   People pay for the lottery.  

 She doesn't know that. 

When people buy a lotto ticket, they are eseentially paying into the jackpot. The more people there are that buy tickets, the higher the jackpot gets. So the gov doesnt spend a dime in this. The gov does, however, get a huge tax check from the winner's payout.

JP-StrongForTwo
by on Jan. 9, 2013 at 2:07 PM

OH i see thank you guys. it makes much more sense to think of it kind of like a raffle. 

and i didnt know the government tax it. thats a good thing. maybe i should start playing LOL> 


Boomboompow12
by New Member on Jan. 9, 2013 at 3:28 PM

The other thing you may not realize is that when a lottery winner  chooses to take annual payments, the lottery puts the money into an interest bearing account.  So basically, the lottery is making interest off your lottery winnings.  But I've heard that they actually pay your annual lottery payments from the interest.  What happens with the extra money I'm not sure.  With the economy the way it is and the interest rates being sooo low, I'm not sure if its even enough to cut a payment!

Financial people suggest you take the lump sum.  You only get 1/2 of the amount, but you can put your money in an interest bearing acct and make money for yourself rather than the lottery commission.

Yes, when you win a lottery the state tax commission and fed tax commission get their part first.  You get what's left over.

Ms.KitKat
by Platinum Member on Jan. 9, 2013 at 3:32 PM

 and at pay-out time, the government comes knocking on your door for the taxes.

Ms.KitKat
by Platinum Member on Jan. 9, 2013 at 3:33 PM

 You would be much better off investing in a good solid stock or bond. Consult with your accountant before you spend your retirement funds on lotto tix.

Quoting JP-StrongForTwo:

OH i see thank you guys. it makes much more sense to think of it kind of like a raffle. 

and i didnt know the government tax it. thats a good thing. maybe i should start playing LOL> 


 

JP-StrongForTwo
by on Jan. 9, 2013 at 3:35 PM

We dont have an accountant. and we dont really have enough money to do stocks or bonds lol. DH has a retirement 401k and thats it. 

i figure a dollar a payday to play the odds isnt that big of a financial burden lol 

Quoting Ms.KitKat:

 You would be much better off investing in a good solid stock or bond. Consult with your accountant before you spend your retirement funds on lotto tix.

Quoting JP-StrongForTwo:

OH i see thank you guys. it makes much more sense to think of it kind of like a raffle. 

and i didnt know the government tax it. thats a good thing. maybe i should start playing LOL> 


 


JP-StrongForTwo
by on Jan. 9, 2013 at 3:38 PM

hey they can have their taxes. if you win 80 mil, and the gov comes and wants their 25% that still leave you with 20mil. 

its not as much as 80mil but its nothing to scoff at lol and well worth the dollar spent on the ticket! 

Quoting Ms.KitKat:

 and at pay-out time, the government comes knocking on your door for the taxes.


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