A BETTER LOTTERY
A BETTER LOTTERY
This is a little different from most of my posts that usually address politics, religion, or values. I just wonder if the powers to be ever think in this manner.
The current rationale when it comes to the various lotteries throughout the states is that the bigger the payout the more people that will participate. This will lead to greater rewards for the state and whatever use it is putting the lottery revenues toward. As proof they often cite the huge increase in ticket sales.
Well, I propose that the model they are using is short sighted and actually limits the potential for state maximization of lottery revenues. Let me explain.
Currently, when someone wins the Lottery they commonly see winnings of $5,000,000-$250,000,000 dollars. Now, when they win these amounts they can then afford to buy a condo in Florida or Hawaii etc. The money quickly leaves the state and is a one shot wonder which many feel no real chance to win. Even if the winner elects to remain in state they most likely invest those winnings in corporations which have headquarters in other states or even other countries.
Now, suppose we changed our pattern. Suppose, instead of a Lottery awarding $30,000,000 we awarded 20 winners each week a $1,000,000 award. NOTE: an instant $10,000,000 revenue gain. With only a $1,000,000 jackpot these 20 people would pay off their credit cards, their mortgage, and possibly share some of it with relatives. In the course of a year the state would see 240 millionaires spread throughout the state. As the lottery continued people would begin to recognize winners nearby and would be encouraged to “give it a go”. BUT AND THIS IS IMPORTANT the proceeds would almost entirely be spent within the state.
I know the whiz kids will say that it wouldn’t be sufficient to make up for the BIG payoffs. OK, keep the big payoff lottery along with the $1,000,000 and see which yields greater long term benefits over a ten year period. I’m willing to bet that 2,400 one million winners regurgitating their winning back into the economy coupled with the multiplier effect would be more stimulating to the economy than one big winner investing outside the state.
Perhaps we are looking at the gate reciepts and not the economic gains.
Just a different point of view.