With as much as we have learned about state-run lotteries over the years, you might be surprised
to find out that there’s a lot more involved with the lottery than what’s on the surface.
From how revenue is distributed to protecting the anonymity of winners, today we will take
a look at 10 secrets that the people who run the lottery definitely do not want you to know. Before
we reveal these mysteries, make sure that you subscribe to the channel to avoid missing out on
future mind-blowing videos just like this one. Defined as a type of gambling that involves the
random drawing of numbers to win a prize, the lottery has become one of the most popular forms
of legal gambling in most states across the US. It wasn't always this way, though. Lotteries were
commonplace throughout the 19th century, but this changed as we switched over to the 20th century
and most gambling across the country became illegal. By the 1960s, the attitudes started
changing as local governments began to see the financial benefits of state-controlled games.
It is still taking a little more time for every state in the union to get on board,
but given how much money these games tend to rake in for state governments annually,
it's really only a matter of time before all states and territories are on board.
Now that we have that quick history lesson out of the way let's jump right in with number 10!
10. When Unemployment Rises, So Do Lotto Sales Starting off, we are going to address a
correlation that may sound incorrect to some. The United States seems to
go through a pretty constant fluctuation when it comes to the employment status of citizens.
As the unemployment rate rises, it seems that so do lottery ticket sales. In a study from 1994,
Indiana University professor John Mikesell found that lottery sales had a tendency to
increase as unemployment rates rose. It's believed that this happens because the
struggling people will see playing the lottery as a possible solution for their financial hardship,
and the longer a bout of unemployment goes on, the more desperation tends to
build amongst those hardest hit. This was backed up by the New York Times in 2008.
With the lockdowns in 2020 due to the COVID-19 pandemic,
quite a few people found themselves jobless pretty quickly, as not all jobs can be done from home.
As we have all witnessed, many have fallen into financial hardship as a result. As lockdowns
continued into 2021, the Mega Millions and Powerball jackpots hit payout amounts into
the billions. The idea of having the slightest possibility of making a fortune in no time was is
super attractive, so people tend to play more. 9. Preying on the Poor and Marginalized
Based on the information given in the previous entry, it may not be a huge surprise to state
that the lottery system as a whole has a big problem with preying on the poorest and least
educated among us. The lottery system is known for targeting minorities as well. While this holds
true for popular games like Mega Millions, where a broader cross-section of society participates,
the poorer segments of society don't always stop there. It's been observed that for these people,
if they don't win on those bigger drawings, they will keep playing through all the different
types of lotteries available to them, usually concluding with a scratch-off ticket frenzy.
Going in with the mentality of "the more you play, the more you win," many people don't realize that
the act of participating in a lottery stimulates the area of the brain where the addiction lies.
There are plenty of myths floating around that unfortunately cause poorer people to chase this
particular dragon. One of the biggest ones is that many believe that playing the lotto
is the only way to accumulate any savings. This belief, amongst others, is what keeps the gambling
addiction poverty cycle moving. 8. Retailers Rely on Lottery Sales
The COVID-19 pandemic has changed a lot about how we live and conduct various activities,
up to and including lottery sales. In multiple states across the country, systems have begun to
be implemented or have had full roll-outs, which will make it easier for citizens to purchase
lottery tickets online. Officials have stated that these changes are essential to keep the
lottery going as the money flowing through the system can help towns and cities financially.
These changes can horribly impact the livelihood of the retail businesses that sell lottery
tickets. Not only does moving the lottery system online end the commissions that retailers receive
that could be more than $25,000 annually, but the lack of foot traffic through retail locations also
reduces the amount of money made in other sales for those locations. Put a bit more simply,
fewer people coming into a bodega to buy lottery tickets means fewer people buying other items.
Extrapolated over almost any amount of time means the store makes significantly less money overall,
leading to the possibility of that store having to close its doors.
7. Lottery Scavengers As we have already established, the lottery
is something that many people take seriously as a way to change their financial futures. Many of us
would do pretty much anything to make financial freedom a reality, even dumpster diving. Over the
years, there have been reports of many looking for lottery winning using methods usually only
performed by the houseless. Those that perform this task are known as scroungers. As it turns
out, many of us tend to misread lottery tickets and will discard winners without realizing it.
This is not really that surprising given how confusing reading many tickets can become.
Back in 2005, a Massachusetts man who was known for searching through his
town’s garbage was rewarded for his patience by finding a $1 million scratch-off ticket. The man's
claim to the ticket was disputed by the person who allegedly threw out the ticket by mistake.
Not all those who find winning tickets this way have had to defend their ownership.
In fact, disputes such as these are pretty few and far between,
as many scroungers have had success in finding winners with minimal pushback.
6. The Lottery is More Entertaining Than Entertainment
According to the North American Association of State and Provincial Lotteries, back during
the 2014 fiscal year, there were $70.1 billion in lottery sales across all states where such things
are legal, which was 43 at that time. That's roughly $300 per adult in the United States.
Of course, the difference in sales state by state varied based on a myriad of factors - for example,
during 2014, North Dakota only had $36 in sales total statewide while Rhode Island had $800
per capita. The entertainment consumption of the entire country,
such as movie tickets, books, video games, and sports tickets, hit approximately $63 million
that same year. So this means that residents of the states that allow a lottery spent
$7 million more than all 50 states did on entertainment as a whole. Truly staggering!
Have any of these surprised you so far? Let us know in the comments! Make sure you stick
around for number one to find out the most insane secret the lottery doesn’t want you knowing.
5. Don’t Invest in a Mask Just Yet We are all aware of the possible
pitfalls of revealing that you are a lottery winner. Not only would you have to deal with
scammers you've never met before trying to get you to invest large sums into shady deals,
but you will also have family and friends coming to you for money constantly. This covers people
you talk to daily and others you haven't seen in over a decade. The obvious solution
for many would be to just remain anonymous, avoiding the usual big reveals and fanfare.
Unfortunately, this solution will only work in Delaware, Kansas, Maryland, North Dakota, Ohio,
South Carolina, and Texas, as those are the only states with a lottery that allow winners to retain
their anonymity. You're not completely out of luck in some of the other states not mentioned,
but it will take some work. In this situation, the best thing to do is to get legal representation,
form a trust, and let the lawyer do the talking for you.
4. The Winners Still Lose Sometimes Most of us would assume that life would instantly
become easier after winning millions of dollars in a lottery. That's how the lottery is advertised
anyway. Many former lottery winners would probably disagree with that sentiment, though,
especially those that we're accustomed to being poor previous to winning. According to a 2016
report in Forbes, a third of lottery winners end up filing for bankruptcy. On top of that, there
are increased rates of other issues among lottery winners, including depression, divorce, substance
abuse, and suicide. Surprisingly, being overly generous toward loved ones is one of the biggest
mistakes that lottery winners make. Many winners do not consider when helping out friends and
family financially because you will still have to pay a gift tax after the fact. This is one of the
ways many successful lottery players blow through their winnings quicker than they intend.
3. The Trouble With Scratch-Offs One of the easiest ways to play the
lottery is with scratch-off tickets. The general assumption about scratch-offs that seems pretty
ubiquitous is that the chances of winning are much higher due to how small the payouts tend to be.
This is, of course, not true, and to top that off, the average payoff for scratch-off tickets doesn't
really make them worth it. As an example, the best payout for a scratch-off in New
York state is about 88 cents per dollar. On top of not-so-great returns, scratch-off lottery tickets
can be extremely addicting. A lot of the money that people end up winning, $5 here or $20 there,
goes right back into buying more scratch-offs diminishing any returns the player did get.
2. How Winnings Are Paid is Important Depending on what type of lottery you've won,
the way the winnings are paid out can be just as important, if not more important, than how
much was won. This is because wins are taxed, with certain places taxing up to 45 percent.
If you do find yourself being the lucky winner of a huge payout, take time to consider things like
whether you want a lump sum payment or to be paid over some time, assuming that option is available.
It may sound like there’s no difference between those, but how much money you end up receiving
overall can be substantial. 1. Where Does the Revenue Really Go?
Despite the imbalance of pros versus cons when analyzing how the lottery works,
many will still play under the belief that even though they run the risk of losing,
the money they spent playing state-run games will be funneled into government programs.
Some examples show this in action. For instance, of the $1.39 billion raised by the California
Lottery in 2014, $97 million was allocated to the Los Angeles Unified School District
for the upcoming school year. As it turns out, examples such as these are few and far between
as not all states operate the budgets the same way California does. In many cases, the revenue from
lottery sales goes into a general state fund which is then allocated out where the state government
deems necessary. IN some instances, the money does end up were initially intended, such as
funding for environmental causes and education. But more often than not, the majority of the
money gets spread out in many ways, with barely any of it ending up were originally intended.
As you can see, playing and winning the lottery is not everything we have dreamt it to be.
And this is really just the tip of the iceberg, as diving deeper into each of
these will reveal even more issues and secrets that we may not be aware of.
Did any of these surprise you? Do you think we missed something crucial?
Let us know in the comments. Be sure to tap that like button if you enjoyed this video
and hit subscribe if you want to see more of this type of content in your recommendations.
Stay Wealthy, and I'll see you in the next video.