Unexpectedly Intriguing!
05 March 2007

California has a problem. Not enough people are playing the state lottery because too many people are winning. From the Contra Costa Times:

... players haven't won any monster jackpots lately despite California's much-touted entrance into Mega Millions in mid-2005.

Lottery officials said the problem that is hurting their operation and allocations of revenue to schools is puzzling -- there just haven't been any huge jackpots.

At an unusually fast pace, players have been nabbing Mega Millions and in-state Super Lotto prizes while they are still relatively small and before they can build up.


During the last half of 2006, there was an "unusual absence" or "drought" of large jackpots to fuel "lotto mania" -- ticket-buying sprees that bolster revenue for the state agency that runs on a July 1 to June 30 fiscal year, according to lottery spokesman Rob McAndrews.

"Jackpot levels are out of the lottery's control and have been significantly below average this year," the Lottery Commission said in a statement.

This "unusually" fast pace of winning would seem to be a good thing, but it isn't working out that way. With so many smaller jackpots, fewer people are playing the lottery, which is sharply reducing the money the state's lottery fund was projected to provide to California's schools. The state's lottery commission is projecting that it will collect substantially less revenue from lower ticket sales:

The panel, largely due to drops in lotto game sales, lowered projected 2006-07 revenue from $3.6 billion to $3.2 billion.

It's the first such mid-year change in a decade and follows a record sales year in 2005-06 of nearly $3.6 billion.

At the outset of Mega Millions participation, there were jackpots of $170 million, $258 million and $315 million. But recently, there have been fewer attention-grabbing prizes.

As a result, public schools -- which are required to get at least 34 percent of sales -- will receive less.

Education will get an estimated $1.13 billion -- $136 million less than last year.

But, get this, apparently state-sponsored gambling has some unintended consequences beyond not meeting education funding projections from poor lottery ticket sales! It turns out that legalized gambling increases the number of people who have gambling problems.

This presents a special problem for the state, which the California Research Bureau, having been commissioned by the State Attorney General's office, recently reported to a state senate committee:

The report found California's efforts to deal with gambling-related problems is inadequate and underfunded.

It also suggested the government's slice of revenue from gambling operations should be weighed against the true costs of the woes it causes -- primarily those related to problem gamblers.

The report provides information for that comparison.

The government makes a few billion dollars a year -- at best -- on its cut of gambling revenues.

Meanwhile, setting aside the expenses of imprisoning those who commit crimes and other liabilities, problem gamblers cost California about $1 billion annually in jobless benefits, welfare, health care and bankruptcies alone.

So, in addition to not providing enough funding for the state's education system, gaming in California costs the state's taxpayers money - and should cost more if the state were adequately meeting the needs of the people with gambling-related problems.

Who's the big loser in all this? It would seem that the California taxpayers are the ones on the hook. It would also seem that the politician's dream funding device of collecting revenue through lotteries and the state's take of gambling revenues, without either controlling spending or increasing more stable forms of revenue, isn't all it's cracked up to be.

That means the taxpayers are likely not going to get the things they were promised for their tax dollars. And if they do, then a growing problem that was made worse by the state and who's solution is already underfunded by the state will be left unattended and will only continue to get worse.

But Californians can always hope that maybe a round of lottery fever will fix the whole thing....


About Political Calculations

Welcome to the blogosphere's toolchest! Here, unlike other blogs dedicated to analyzing current events, we create easy-to-use, simple tools to do the math related to them so you can get in on the action too! If you would like to learn more about these tools, or if you would like to contribute ideas to develop for this blog, please e-mail us at:

ironman at politicalcalculations.com

Thanks in advance!

Recent Posts

Stock Charts and News

Most Popular Posts
Quick Index

Site Data

This site is primarily powered by:

This page is powered by Blogger. Isn't yours?

CSS Validation

Valid CSS!

RSS Site Feed

AddThis Feed Button


The tools on this site are built using JavaScript. If you would like to learn more, one of the best free resources on the web is available at W3Schools.com.

Other Cool Resources

Blog Roll

Market Links

Useful Election Data
Charities We Support
Shopping Guides
Recommended Reading
Recently Shopped

Seeking Alpha Certified

Legal Disclaimer

Materials on this website are published by Political Calculations to provide visitors with free information and insights regarding the incentives created by the laws and policies described. However, this website is not designed for the purpose of providing legal, medical or financial advice to individuals. Visitors should not rely upon information on this website as a substitute for personal legal, medical or financial advice. While we make every effort to provide accurate website information, laws can change and inaccuracies happen despite our best efforts. If you have an individual problem, you should seek advice from a licensed professional in your state, i.e., by a competent authority with specialized knowledge who can apply it to the particular circumstances of your case.