FYI, Here in Western Australia the lottery is run by the State Lotteries Commission. The profits raised by the lottery in the state do not go into consolidated state revenue but are distributed to worthy community causes by the independent commission .
Well, at least that’s where you’re told the money goes, but in reality citizens have no real proof the money goes to worthwhile charities or those in need. However everyone “feels good” about the narrative.
I don’t think anyone would be surprised to find out that many big lottery winners are non-existent, especially in big cities, where most people don’t know each other, and wouldn’t bother to verify the win.
@@michaelsmith4904interest is income. It makes sense to pay tax on it. Paying to file your tax return is not the same at all, and from a British tax payers PoV, sounds absurd.
Australian lotteries are tax excempt. Taxing it would be to basically lie about the total amount. This is the same logic used when shopping, where shops in Australia post the post tax cost, not the pre tax cost. So the value you see is the value you pay or get.
@@rustyshackelford3371 my pay-slip is clear on everything every fortnight. It itemises every single thing exactly, even tax. Nothing is left out. My tax return is simply an adjustment to make sure everything was done right, and since Australia does everything in an easy way to fill out online (my pay summary and other associated finances are automatically uploaded) then it takes almost no time.
In malaysia, lottery winnings are not taxed and the winner's name is not revealed. There is a not unfounded suspicion that the lottery is used to launder the money of a few super rich cronies.
There's something you're missing: Most lottery winners resume previous living standards within a few years, with many reapplying at their old jobs. They simply blow all the money away on stupid stuff.
That goes even further to pseudo 'lottery winners'.. aka.. Professional athletes and movie/music stars.. They burn through their money and have nothing left to show for it at the end of their careers.. I appreciate their contributions to the economy.
Most would be better off taking the annuity rather then the lump sum. It would give them time to get used to having money. When the friends and distant relatives come out of the wood work asking for money the winner could tell them sorry I took the annuity and don't have the money left over this year. They would be much less likely to be broke in a few years. Some income tax advantages also.
Because they don't know how to invest. You can only multiply your money by investing, even if you put in a bank you are technically losing money to inflation very fast. Invest Invest Invest.
Very good analysis. Another reason for the popularity of lotteries is that they have no time or talent requirements. Anyone over 18 is able to play at the same level as anyone else, and can do so in a literal instant.
@@GGWP-nx3kn No KIdding ! Here in Canada they are thinking of lowering the age for lotto tickets to 16. Just imagine if you won a jackpot at 16 for 48 Million. Your Dick/pussy will be well taken care of by the massives.
Here is an interesting point I didnt realise until you mentioned it. US Powerball is 5 numbers + 1 Powerball. Here in Australia it is 7 numbers + 1 Powerball. Our chances of winning must be significantly less.
Yes and no, in the U.S there are way more numbers to choose from, while that in Australia is much less numbers to choose from, so it's more difficult in the u.s
I buy a lottery ticket from time to time. I well know the odds of my winning are nearly zero. But, if I did win it would change my life. Fantasizing about that remote possibility is to my mind or emotion worth two dollars.
You should hope you never win the jackpot. That kind of money is life-ruining. Winners have described how their entire social network, friends & family, become suspect. Even if they’re never asked for money winners struggle to define true friends from friends who are hanging around for money. Or winners sabotage relationships by offering money. Overall you’d be better off with winnings of “only” a few hundred thousand, nice monetary boosts but not necessarily life-altering.
Could you make a video about how Moomoo's free stock offer works? It's hard to understand how they're able to "give away" 15 free stock when someone deposits. Some info on this in your usual analytical style would be a good watch and help us understand Moomoo's business model!
They get you in the door and then when you trade they make money. Their bet is that you trade more and thus pay more fees than the value of the stocks.
Lottery is a sort of passive gambiling, nothing serious. Unlike casinos, where people lose a lot, get addicted, become homeless etc. To invest in stocks you need lot more money than play a line in the lottery. At least the money you lose in the lottery go to fund some good social causes.
I have bought several and the closest I've been to winning is when somebody I know got a house. Even then it is still a liability if you don't produce the income necessary to keep up with the maintenance and service fees of the residence, so she sold it for less than half the value.
I never knew lotteries were state run until today. I had always thought it was private companies that make a profit through the pool and governments through the taxes. I had no idea government ran it. That feels like 5x worse than my previous impression.
@@user-kc1tf7zm3b If private companies were running lotteries, the payouts from the games would be a lot better. The government-run lotteries pay back 50% of revenue in player winnings. When the mob was running numbers, they would pay out around 60%. The worst games in a casino have a payback of around 80%, with the best games close to 99%. So yes, it does matter who runs a game. With free-market competition, once again, proving it is best option.
@@rustyshackelford3371 You are not bloody paying attention! Your chances of winning the grand prize in Powerball is functionally zero. ZERO. So, if you spent $10 on lottery entries every week for 50 years, your total cost _and_ loss, before any minor winnings, is a significant $26,000. This is why lotteries are labelled a tax on the poor and stupid.
@@user-kc1tf7zm3b So why is the government in the business of running a lottery? Didn't I show that if private companies were allowed to run lotteries, there would be more competition and better payouts to the consumers? Yes, lotteries are called a tax on stupid people, because the games and payouts are crap, because it is run by the government. Everything would improve,including lotteries, with more competition. And then, perhaps, lotteries would not be considered a tax on stupid people because then, well like in the casinos, they pay back a lot better.
the government didn't run it and regulated than criminals would. the lottery is like drugs to stupid fucking people. they need to keep playing the numbers. it's best that the government regulate this as opposed to just letting gambling companies deal with it. the government has been running the lottery fine since before you even knew it so it's not a problem relax.
the complexity of the tax system is on purpose to allow for high net worth individuals to pay less. ie loopholes. in the uk, their national lottery is very active in promoting the projects they do to benefit the population - "the money goes to good causes & i might win the jackpot" is a really strong allure. also helps you feel less disappointed if you dont win, which is the reality for most people. the stat that you are more likely to get struck by lightening than win the lotto is an interesting one because no one believes they will get struck by lightening but everyone believes they have a chance of winning the jackpot.
@@HH-le1vi So true. How come those poor people don't spend tens of thousands setting up complex corporate structures to optimize tax on their $20k of annual income? /s
The lottery is just a poor people tax. Well off people dont play the lottery and the people who do will probably never win so its just a tax on poor people.
My friend is thinking that she can crack the code to lottery numbers and she's investing so much time and money on this that's just sad. She even has a book about the dude who allegedly did that... Have a great day.
I play the lottery, its literally the only gambling i do. I am aware i am losing this money, but i can afford it because a ticket is not very much money. I like the idea that i could, in theory, wake up to a life changing amount of money. I auto buy a ticket once a week, i dont even check the lotto app every week, just when i remember to. I dont even need the money from the lottery, i have a good job, i just like the idea that, theoretically, shit could get incredibly real out of the blue one day. One lottery ticket costs far less than a meal, i spend money on far more stupid stuff.
I'm not sure if it's the same around the world but at least in the UK a lot of the winners seem to be from already rich areas not many people on council estates win or poor people. I often wonder if it's random at all
Lotteries have two differences with gambling : delayed result and hope. Lotteries are not capped (you can buy multiple tickets) but they are always delayed. You have to wait the result. So there is no adrenalin rush, no real excitement - and people aren't realizing they're gambling, they don't feel like a gambling addict. The delay isn't a weakness in that matter - it's basically why lotteries are so popular. People buy tickets like they would buy a dream if it was possible. When you buy that ticket, you buy a probability of a life changing situation. And the delay enhances that : that's one week of cheap, delusional hope, and a minute of regret ("2$ is nothing, it's not even a cup of coffee").
Zero risk. With a one time payout, the winner does not have to worry about the lotto organisation being closed and wound down. No matter how unlikely this outcome may be. It is a proverbial bird in the hand.
@@nicholasdean3467 If you are worried about cash becoming useless, invest the cash from the annuity with other forms of investments. As for the state ‘closing’, this is extremely unlikely to happen in your lifetime. Paranoia is the pursuit of fools.
My main source of income is securities litigation consulting and I have worked several matters where a financially illiterate person won a massive amount in a lottery, burn through it as fast as possible, and then sued their advisors and accounts despite repeated warnings to rein in spending. Addiction and being taken advantage of also become a major problem. In short, winning the lottery ruins their lives and those around them.
My parents used to play this is Poland and stopped when I showed them how much money they've lost over the period of 5 years or so... Their rationalle always was "I know I probably won't win but... what if!". And so, thousands went down the drain. :)
generally when that is allowed to happen a bunch of rich people hear about it, draw up a contract to share any winnings, buy every ticket possible, and make out with a small gain. i swear i heard a story of that happening, they spent tens of millions on tickets, and lost to someone who spent $12!
@@boldCactuslad could certainly Happen in Reality, losing to Luck. But I'm Not talking about Something as insane as that, you could theoretically "Just" use a few Millions, with the Hope that expected value is on your Side, so that the Potential downside wouldn't Cost you all of your Investment, and you could still get Out profitable if you didn't had every single combination. Because Like you Said, If someone Played every single combination, they could be in serious financial Trouble If they have to Share the Jackpot and the other large prizes.
in europe only a select couple countries have the euromillions, and many of them and other eu-countries have their own lotteries, and many of those lotteries have different games. the main difference with the powerball: the euromillions and the countries own lotteries pay out the full price and most of them pay it out taxfree.
Same in Canada. If you win a million dollars you get a million, in a lump sum, tax free. There are a few lotteries that have prizes of so much a week or month for life, but most just pay out a lump sum.
Us rules are messed up. Loterry winnings aren't considered income in the UK so are tax free. There aren't any taxes on gambling winnings, if you allow them one way, then you have to allow people to write off the losses. The taxman doesn't want to take the risk.
However, when you point out around @8:20 that you are penalized for taking on extra risk - this is overstated. This is just a mathematical inevitability of how house advantage works. If you take the slim house advantage of a casino on a 1:1 bet and figure the house advantage on a no table limit game where you were to press your winnings up to lottery like returns, you would also be looking at a similar expected return.
Well statistical you should buy a couple tickets a year because you basically have the same chance of winning as someone who buys 1000 dollars a year .
You're still losing out on opportunity cost. You might as well be burning the money you're spending on tickets. That $8 a year you spend on lottery tickets is $8 dollars that could be spent on anything, and just about anything else you could buy for $8 will provide you with greater utility than 4 losing lottery tickets.
Pick 3, Pick 4 and Pick 5 have at least have decent odds. $500 on 1/1K odds, 5K on 1/10K odds and 50K on 1/100K odds. If you are playing say $2/day you are fine. Scratch offs and powerball are flushing your money down the toliet.
Rubbish. The player will still lose far more money with gambling cost losses than what is offset with winnings, which will only be minor in the absolute scheme of things. This is especially true when one gambles every week over the years and decades. How many people in your social circle do you personally know that have won the Powerball? Exactly. Zero.
The fact lottery winnings is still taxed multiple times from initial prize value and the eventual amount the winner gets. What makes it even worse, if he invest the $600million he ended up with, he yet again pays capital gains taxes. What happened to double taxation not being legal ? The world have moved far beyond double taxation, in this example we are already looking atleast at triple taxation.
I used to live in the hood. Watching these addicts coming in day after day so hopeful but constantly losing time after time was depressing. I'd tell them to invest in the stock market or at least Bitcoin in its heyday and I'd get loud laughs. Nobody could ever name a lottery winner with their immediate response of "can't win if you don't play" because they didn't know anybody successful in the stock market. Florida in the beginning with the state lottery got people hooked on the idea of lottery funds were helping schools. Then the state legislature slashed school funding so there was no benefit to the public with the lottery. In Florida, they're doing daily lotteries three times a day getting more of these addicts coming in more. In my old neighborhood, you'd avoid gas stations and stores around the last 15 minutes of the lottery cut off because of how nasty people would act thinking they were going to win but always lost.
@@jahjoeka 100% capital gains? $26k to $52k over 10 years is very easy, without much effort at all. So, the $26k loss now becomes a $52k loss, due to opportunity costs. This underscores the sheer reality that lottery tickets are the pursuit of morons.
Australia's eight states & territories?? We have six states & ten territories; so how do you come up with 8?? I think you maybe meant six states & territories (as I'd believe only two of the ten territories actually run their own lotteries)
Bloody hell! ‘Australia’s eight states and territories’, which comprise of NSW, VIC, QLD, SA, WA, TAS, ACT and NT, is a perfectly valid, and reasonable statement to make with common everyday speech. Especially for a statement made to an international audience on TH-cam. Yes, the channel host did not mention the internal territory of Jervis Bay. But, let’s get real for a moment: nearly all Sydneysiders could not point Jervis Bay on the map, with next to nobody ever visiting the federal coastal enclave.
At 10:40 is where you are making the false asumption that everyone who plays the lottery is in the same category group and have the same intention/goal. In my case, I am not poor when it comes to my income level. However, I started playing the lottery on a weekly basis in my late 40s. The amount of money I spend would have little or no impact long term if I invested it all. I am age 55 now. I spend this money as a method of having some hope (even if it is false hope). It does give me something to look forward to each week (the chance of winning is worth it to me to spend this money each week). I realize that it is extremely unlikely I will ever win, but the chance is not zero percent chance of winning (and that is why I keep buying lottery tickets each week, as opposed to putting the money into savings/investments (its such a trivial amount of money, that will get absorbed by medical expenses when I get older anyway).
If you play the lottery at $10 a week, for 20 years straight, the total loss is $10,400. This is an idiotic way to spend and lose $10,400, as it is just not a trivial amount of money for most people.
@@garygarside9782 Over a 50 year work career, this weekly $10 lottery contribution totals a very significant $26,000. How can losing $26,000 be fun at all? Moreover, with the massive effect of compound interest, $10 saved each and every week, with a 10% interest rate, will amass a staggering *$745,000* after 50 years. Mr Garside, you need to listen to your accountant more.
You make a mistake my friend. The reason people pay $2 for a lottery ticket once a week is because it gives them $2 worth of excitement - which wouldn't be very difficult since it's only a measly $2. When a person spends an evening gambling at a casino we would like to think that they walk away thinking that they got their money's worth - otherwise they would only do it once.
That’s by design. The budget deficit is in the form of US Treasury bills, an easy investment for the wealthy. Debt servicing is another giant pump to transfer wealth. In a sense it’s the wealthy paying taxes but they retain the right to get it back…with interest. This wealth transfer can only be undone by taxing the wealthy at 1950s income tax rate AND instituting an annual wealth tax. Without this the US is trending toward economic feudalism, the teaming masses will be wholly dependent on the charitable whims of a small cadre of ultra-wealthy.
I don't gamble unless I have good reasons to believe I have an edge but I think this wasn't a very good explanation of why people play the lottery. I think instead of using the dollar amount one should consider the "subjective utility". To those people $2 loss is basically meaningless but even 1 million after taxes is a life changing amount of money for them and their entire family. If one wishes to understand real people, vs hypothetical uber rational Spock like people, then they should consider what both the potential loss and potential gain mean to those people in subjective terms. Losing $2 doesn't even move the subjective needle, if you will, but winning 600 million breaks the needle. Also, in some game theory settings, like in some fairly specific poker situations, the gto move is actually a -ev at face value or from a naive pov but isn't actually -ev when viewed from the correct angle. What I mean is that sometimes a person might make a call, just an example, knowing full well that the call was -ev itself but isn't actually -ev in the long term because the game of poker isn't some static game and when they do hit their hand they have a high probability of a payout that compensates for the loss in ev by calling.
I think some of the probability calculations were off. You have to account for the probability of sharing the grand prize which lowers EV. Also the multiplier EV don’t make sense. The x10 multiplier is always going to have the highest EV. Your calculation looks like it is just showing what portion of a ticket’s value that comes from a x10 multiplier which isn’t the context you us it in. I think there are plenty of reasons to criticize the lottery but at the end of the day it’s just a form of entertainment. I’ll over pay for a beer out at a bar because it is fun just like I’ll pay for the fantasy of winning the lotto
Sigh. Much as I hate to rely on fiction, in this case a movie, you really ought to see "Liberty Heights." It is more obviously about pre-integration society in Baltimore, MD, but the plot revolves around a Jewish bookie and real, maybe still living person, Little Melvin. The bookie goes to prison, and Little Melvin simply takes over his territory. In short, gambling was big business, just not legal.
Most lottery players are low income which funnels money to our tax revenue system but rarely gets to see the benefits in their neighborhoods because who wants to feed the poor and educate children?
I am generally in favor of state lotteries. There are plenty of things that we would be better off without. Cigarettes, alcohol, narcotics and gambling are unfortunately something people will continue to consume whether or not it's legal. Alcohol prohibition was tried and it failed. The war on drugs has only introduced more potent drugs such as fentalyl which makes drug overdoses far more common than before the war on drugs began. If you ban these things, organized crime will step in and fill the void. Better for poor people to have credit card debt to the state than cash debt to the sketchy dudes who would otherwise contol the underground gambling scene.
This cannot be true. As lotto is entirely a game of chance, with no skill involved whatsoever, the winners have to reflect the segments of society which purchase more of these pointless lotto tickets.
You are over thiniking the lottery and I don't think you can really compare the losses to typical gambling activity. It is definitely irrational to play but I don't think that it is as ruinous as ordinary gambling. It will be interesting to see the numbers on how lotteries compares to other forms of gambling in terms of addiction and negative financial effects. Not all economic decisions are rational or intended to be. Sometimes, people just want to play because they want to or just a little hope, even if it is unrealistic.
"because infinity divided by a number is still infinity" No, it's not. Mathematics and statistics can't be bend for an argument, the concept of infinity is not a number, it cannot be used for operations.
Better odds than the American stock market. At least the lottery is real and will actually pay out. I've been in the market since 1997 and it's nothing but a low paying job. It's all lies. The thing that's difficult to understand is the pareto distribution 80% 20%. I believe we're in a pareto inefficient market. I think this is driving the growth of public debt and increasing the wealth of the top 1%. I think the lottery creates hope to offset the negative social impact of the pareto inefficiency.
A difference in respect to the negative return on the lottery vs. gambling is the time element: 90% return within a tiny timeframe is a lot more expensive, than loosing half in a couple of days.
The best is having the money been giving to you I nquotes... this will give you all the money and avoid losing the money in 5 years... you will live the rest of your live with no stress.
On the subject of taxation: yes lotteries do pay for public services, but since the people playing lotteries skew to the poorer side on average what this actually means is that the wealthy are getting a tax break and not providing the societal support that they should be, and it’s actually the poor people themselves who are funding social welfare programs. It’s taking money from the poor so that the rich can horde more of their wealth, essentially.
Some places even write the budget not accounting for this income source. when the lottery money comes in there, it doesn't contribute any extra money to education: the gambling pile replaces part of the tax pile before it goes to the school.
Insightful comment! I work in the Tax sector and all the wealthy customers pay little to none in tax liability in comparison to their income. Mostly because they have tax deductible saving assets and they itemize. The poor people are forced to take the standard deduction because they aren't aware they have a choice otherwise. You are correct the wealthy makes bookoo money and stiffs the government on taxes. Keeps them increasingly wealthy and the poor paying into scams like the lottery trying to be instantly wealthy.
Lottery = Old mafia numbers game. Anyways, I actually know someone who won the lottery twice all by themself. Millions. Once made public, women from his past came out and forced DNA tests LOL seriously. He had to pay back 6 figures to two women. Bought about 20 vehicles, daily visits to the casino. Now, so broke, owns nothing, has no where to live and nothing to show for it.
48% expected return, 50% or less payout lump sum, 30% tax, so expected payout is about -83%, and if you win, you are very likely to blow it all and be poor again in a few years.
Not just poor but likely with a thoroughly ruined social network. Winners will often quickly gather a circle of money-hungry “friends”. Existing friendships often get strained by the presence of excessive money. Winners sometimes even sabotage relationships by offering money. There are some jackpot winners who lose their heads completely and fall into criminal circles who have murdered them for a share of the money. If you play and win your best outcomes are with middling prizes. Nice fiscal boosts but not a life-charging pile of money.
False. At the chances of winning the Powerball is always functionally zero with every game. Virtually all the many, many millions Powerball players will never win the grand prize in any given year. If an investor invests their money in a range of quality stocks, this person will always comes out ahead over time, especially over decades.
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FYI, Here in Western Australia the lottery is run by the State Lotteries Commission. The profits raised by the lottery in the state do not go into consolidated state revenue but are distributed to worthy community causes by the independent commission .
Well, at least that’s where you’re told the money goes, but in reality citizens have no real proof the money goes to worthwhile charities or those in need. However everyone “feels good” about the narrative.
I don’t think anyone would be surprised to find out that many big lottery winners are non-existent, especially in big cities, where most people don’t know each other, and wouldn’t bother to verify the win.
How about no
People who advocate for progressive taxation don't understand how percentages work. People who earn more already pay more into the system.
That Americans have to pay to file their own taxes that they have already paid is even more ridiculous than the idea of a lottery
also have to pay taxes on interest even when it doesnt keep up with inflation
@@michaelsmith4904interest is income. It makes sense to pay tax on it. Paying to file your tax return is not the same at all, and from a British tax payers PoV, sounds absurd.
“Land of the free”
Just wanted to point out that is free to file at any level... its just not as easy. You don't have to pay to file, you pay to file with convenience.
Australian lotteries are tax excempt. Taxing it would be to basically lie about the total amount. This is the same logic used when shopping, where shops in Australia post the post tax cost, not the pre tax cost. So the value you see is the value you pay or get.
By the same logic, wouldn't my employer's statements to me about the total amount of my annual labor be a lie if it were taxed?
@@rustyshackelford3371 my pay-slip is clear on everything every fortnight. It itemises every single thing exactly, even tax. Nothing is left out.
My tax return is simply an adjustment to make sure everything was done right, and since Australia does everything in an easy way to fill out online (my pay summary and other associated finances are automatically uploaded) then it takes almost no time.
@rustyshackelford3371 Yes, but this is a 'lie' that is mandated by the government.
@@THATGUY-ct8xz Europe does it, Australia does it. The US does not
That sounds reasonable.
In malaysia, lottery winnings are not taxed and the winner's name is not revealed. There is a not unfounded suspicion that the lottery is used to launder the money of a few super rich cronies.
1984 was the most difficult book I have ever read, I put it down several times due to how depressing it was but I'm thankful I finished it.
Orwell wasn't a good writer.
@@borisnegrarosa9113 brilliant contribution to the conversation🙄
@@Tinfoiltomcat At least you liked your own comment. That counts too.
How old are you ?
@@borisnegrarosa9113It is better to stay silent than to speak rubbish.
There's something you're missing: Most lottery winners resume previous living standards within a few years, with many reapplying at their old jobs. They simply blow all the money away on stupid stuff.
That goes even further to pseudo 'lottery winners'.. aka.. Professional athletes and movie/music stars.. They burn through their money and have nothing left to show for it at the end of their careers.. I appreciate their contributions to the economy.
@Andre G as the ageless saying goes, a fool and his money are soon parted.
Materially wealthy but poor in their souls
Most would be better off taking the annuity rather then the lump sum. It would give them time to get used to having money. When the friends and distant relatives come out of the wood work asking for money the winner could tell them sorry I took the annuity and don't have the money left over this year. They would be much less likely to be broke in a few years. Some income tax advantages also.
Because they don't know how to invest. You can only multiply your money by investing, even if you put in a bank you are technically losing money to inflation very fast. Invest Invest Invest.
Negative 52% - sounds like the return on a marriage and a divorce 🤣
In this senerio
you can't f the lottery ticket
Lottery ticket f you
There's a reason why it's called the stupid tax.
Well, if they didn't spend it on the lottery, they'd just blow it on fast women and slow horses.
@@darkgalaxy5548I mean at least then they would get their carrot wet.
@@darkgalaxy5548where I can buy women for 2$ lmao
Where I'm from we call this the Stupidity Tax.
💀🙃
Where are you from?
@@enginerunsable properly germany .. ;)
@@peterweber79 Lol
You must be from High Horse Village.
Very good analysis. Another reason for the popularity of lotteries is that they have no time or talent requirements. Anyone over 18 is able to play at the same level as anyone else, and can do so in a literal instant.
Here in Canada an 18 year old girl won 48 million dollars. My day is 82 an has been playing since 1982 !
@@starlight7830 Nowhere is it written that experience is taken into account when granting the prize! 🏆☝️ 😂
@@GGWP-nx3kn No KIdding ! Here in Canada they are thinking of lowering the age for lotto tickets to 16. Just imagine if you won a jackpot at 16 for 48 Million. Your Dick/pussy will be well taken care of by the massives.
Here is an interesting point I didnt realise until you mentioned it. US Powerball is 5 numbers + 1 Powerball. Here in Australia it is 7 numbers + 1 Powerball. Our chances of winning must be significantly less.
Yes and no, in the U.S there are way more numbers to choose from, while that in Australia is much less numbers to choose from, so it's more difficult in the u.s
in australia theres no tax on winnings tho
The last clip of a bus station is from Ljubljana, Slovenia ☺️
Every time I buy a powerball ticket I say under my breath, "Don't worry, Kevin. Daddy is going to get you back."
I buy a lottery ticket from time to time. I well know the odds of my winning are nearly zero. But, if I did win it would change my life. Fantasizing about that remote possibility is to my mind or emotion worth two dollars.
You have more chances finding a recipe for immortality in the next 10 years than winning that rubbish. 😂
You better invest that 2$ in a shitcoin with 1000x potential. Ohh no, that's a worse advice😂
You should hope you never win the jackpot. That kind of money is life-ruining. Winners have described how their entire social network, friends & family, become suspect. Even if they’re never asked for money winners struggle to define true friends from friends who are hanging around for money. Or winners sabotage relationships by offering money.
Overall you’d be better off with winnings of “only” a few hundred thousand, nice monetary boosts but not necessarily life-altering.
It’s all an illusion
Same. I enjoy the experience of thinking what I would do with it. Worth $2 to me
Excellent deep dive into the numbers, and the Orwell link makes the word dystopian very appropriate.
Could you make a video about how Moomoo's free stock offer works? It's hard to understand how they're able to "give away" 15 free stock when someone deposits. Some info on this in your usual analytical style would be a good watch and help us understand Moomoo's business model!
They get you in the door and then when you trade they make money. Their bet is that you trade more and thus pay more fees than the value of the stocks.
I thought it was like penny stocks or something
@@tjakkobosma5872 he is right.
I imagine those stocks aren't going to be worth more than a few dollars each
Scam
Lottery is a sort of passive gambiling, nothing serious. Unlike casinos, where people lose a lot, get addicted, become homeless etc. To invest in stocks you need lot more money than play a line in the lottery. At least the money you lose in the lottery go to fund some good social causes.
Why is that girl looking at those donuts like that
I’ve only ever bought 2 lottery tickets about a decade ago. Very high jackpot. Payed $4. Won $4. Haven’t played since.
On behalf of whatever State you were in, we thank you for your generous interest-free short-term loan of $4.
I have bought several and the closest I've been to winning is when somebody I know got a house. Even then it is still a liability if you don't produce the income necessary to keep up with the maintenance and service fees of the residence, so she sold it for less than half the value.
Quit while you’re not behind lol
I never knew lotteries were state run until today. I had always thought it was private companies that make a profit through the pool and governments through the taxes. I had no idea government ran it. That feels like 5x worse than my previous impression.
What difference does it make who runs the lottery? The odds of winning, which is functionally zero, is totally rubbish, either way.
@@user-kc1tf7zm3b If private companies were running lotteries, the payouts from the games would be a lot better. The government-run lotteries pay back 50% of revenue in player winnings. When the mob was running numbers, they would pay out around 60%. The worst games in a casino have a payback of around 80%, with the best games close to 99%. So yes, it does matter who runs a game. With free-market competition, once again, proving it is best option.
@@rustyshackelford3371 You are not bloody paying attention! Your chances of winning the grand prize in Powerball is functionally zero. ZERO.
So, if you spent $10 on lottery entries every week for 50 years, your total cost _and_ loss, before any minor winnings, is a significant $26,000.
This is why lotteries are labelled a tax on the poor and stupid.
@@user-kc1tf7zm3b So why is the government in the business of running a lottery? Didn't I show that if private companies were allowed to run lotteries, there would be more competition and better payouts to the consumers? Yes, lotteries are called a tax on stupid people, because the games and payouts are crap, because it is run by the government. Everything would improve,including lotteries, with more competition. And then, perhaps, lotteries would not be considered a tax on stupid people because then, well like in the casinos, they pay back a lot better.
the government didn't run it and regulated than criminals would. the lottery is like drugs to stupid fucking people. they need to keep playing the numbers. it's best that the government regulate this as opposed to just letting gambling companies deal with it. the government has been running the lottery fine since before you even knew it so it's not a problem relax.
Also if won in states that have income tax, like California....the guy would have paid the top rate for both state and federal income taxes.
I’ve heard that in California there’s no state taxes on lottery winnings
the complexity of the tax system is on purpose to allow for high net worth individuals to pay less. ie loopholes. in the uk, their national lottery is very active in promoting the projects they do to benefit the population - "the money goes to good causes & i might win the jackpot" is a really strong allure. also helps you feel less disappointed if you dont win, which is the reality for most people.
the stat that you are more likely to get struck by lightening than win the lotto is an interesting one because no one believes they will get struck by lightening but everyone believes they have a chance of winning the jackpot.
Poor people can use the same loopholes if they want to. It's not just for the wealthy.
@@HH-le1vi So true. How come those poor people don't spend tens of thousands setting up complex corporate structures to optimize tax on their $20k of annual income?
/s
@@arnoldvosloo220 if you think it costs that much to setup an LLC you're ignorant. It's way less than that and the entire cost is tax deductible.
You can increase the chances of getting hit by a lightning tho.
The lottery is just a poor people tax. Well off people dont play the lottery and the people who do will probably never win so its just a tax on poor people.
12:21 - I observed a trend of behaviors and attitudes surrounding lottery gambling. They are similar to the writs Martin Luther detested.
My friend is thinking that she can crack the code to lottery numbers and she's investing so much time and money on this that's just sad.
She even has a book about the dude who allegedly did that...
Have a great day.
The fact that the government is taking advantage of her and people like her is horrible
I play the lottery, its literally the only gambling i do. I am aware i am losing this money, but i can afford it because a ticket is not very much money. I like the idea that i could, in theory, wake up to a life changing amount of money. I auto buy a ticket once a week, i dont even check the lotto app every week, just when i remember to. I dont even need the money from the lottery, i have a good job, i just like the idea that, theoretically, shit could get incredibly real out of the blue one day. One lottery ticket costs far less than a meal, i spend money on far more stupid stuff.
Not a day goes by when driving I am not day dreaming about how I would spend the winnings in a modest way. Nobody wants to be a wage slave anymore 😢
Boomer: Hey wagie, I don't pay you to comment on yt, go back to work otherwise i will fire you!
I'm not sure if it's the same around the world but at least in the UK a lot of the winners seem to be from already rich areas not many people on council estates win or poor people. I often wonder if it's random at all
Plenty of poor people win in the US. They also return to being poor after they waste it all.
I get two dollars of enjoyment from buying a ticket and thinking about what a would do with the money.
I can imagine that without needing a ticket
Exactly. I don't play every drawing but it's fun every once in a while. Same with scratch-offs. It's the only gambling I do.
I buy them once in a while, I know damn well im not going to win anything meaningful, though on the slim off chance I do, it would be pretty sweet.
Lotteries have two differences with gambling : delayed result and hope.
Lotteries are not capped (you can buy multiple tickets) but they are always delayed. You have to wait the result. So there is no adrenalin rush, no real excitement - and people aren't realizing they're gambling, they don't feel like a gambling addict. The delay isn't a weakness in that matter - it's basically why lotteries are so popular. People buy tickets like they would buy a dream if it was possible. When you buy that ticket, you buy a probability of a life changing situation. And the delay enhances that : that's one week of cheap, delusional hope, and a minute of regret ("2$ is nothing, it's not even a cup of coffee").
Most are dumb and irrational. Lotto tickets are the ultimate in no effort, no skill gambling.
This analysis is so true and informative.
1:21 This quote is almost serious enough to make me reconsider buying lottery tickets 😆 😂
Mumu is a synonym for vagina in german lol
Why would he not take the 30 year payout? Or however long it takes? Isn't it 5.5 million a month? (minus taxes)
People are stupid.
He would prefer to blow through it way faster.
Zero risk. With a one time payout, the winner does not have to worry about the lotto organisation being closed and wound down. No matter how unlikely this outcome may be.
It is a proverbial bird in the hand.
@@user-kc1tf7zm3b If the state closes. Your money is useless either way.
@@nicholasdean3467 If you are worried about cash becoming useless, invest the cash from the annuity with other forms of investments.
As for the state ‘closing’, this is extremely unlikely to happen in your lifetime. Paranoia is the pursuit of fools.
My main source of income is securities litigation consulting and I have worked several matters where a financially illiterate person won a massive amount in a lottery, burn through it as fast as possible, and then sued their advisors and accounts despite repeated warnings to rein in spending. Addiction and being taken advantage of also become a major problem. In short, winning the lottery ruins their lives and those around them.
A wise Scotsman once said that the lottery is a tax on the poor.
The lottery is dumb and poor people tax. Sad our governments peddle in this filth.
My parents used to play this is Poland and stopped when I showed them how much money they've lost over the period of 5 years or so... Their rationalle always was "I know I probably won't win but... what if!". And so, thousands went down the drain. :)
I still Wonder when the day will come, that the expected value is high enough (i.e. Jackpot reaching mutliple Billion dollars)
generally when that is allowed to happen a bunch of rich people hear about it, draw up a contract to share any winnings, buy every ticket possible, and make out with a small gain. i swear i heard a story of that happening, they spent tens of millions on tickets, and lost to someone who spent $12!
@@boldCactuslad could certainly Happen in Reality, losing to Luck.
But I'm Not talking about Something as insane as that, you could theoretically "Just" use a few Millions, with the Hope that expected value is on your Side, so that the Potential downside wouldn't Cost you all of your Investment, and you could still get Out profitable if you didn't had every single combination.
Because Like you Said, If someone Played every single combination, they could be in serious financial Trouble If they have to Share the Jackpot and the other large prizes.
in europe only a select couple countries have the euromillions, and many of them and other eu-countries have their own lotteries, and many of those lotteries have different games.
the main difference with the powerball: the euromillions and the countries own lotteries pay out the full price and most of them pay it out taxfree.
Same in Canada. If you win a million dollars you get a million, in a lump sum, tax free. There are a few lotteries that have prizes of so much a week or month for life, but most just pay out a lump sum.
Us rules are messed up. Loterry winnings aren't considered income in the UK so are tax free. There aren't any taxes on gambling winnings, if you allow them one way, then you have to allow people to write off the losses. The taxman doesn't want to take the risk.
However, when you point out around @8:20 that you are penalized for taking on extra risk - this is overstated. This is just a mathematical inevitability of how house advantage works. If you take the slim house advantage of a casino on a 1:1 bet and figure the house advantage on a no table limit game where you were to press your winnings up to lottery like returns, you would also be looking at a similar expected return.
Well statistical you should buy a couple tickets a year because you basically have the same chance of winning as someone who buys 1000 dollars a year .
You're still losing out on opportunity cost. You might as well be burning the money you're spending on tickets. That $8 a year you spend on lottery tickets is $8 dollars that could be spent on anything, and just about anything else you could buy for $8 will provide you with greater utility than 4 losing lottery tickets.
Pick 3, Pick 4 and Pick 5 have at least have decent odds. $500 on 1/1K odds, 5K on 1/10K odds and 50K on 1/100K odds. If you are playing say $2/day you are fine. Scratch offs and powerball are flushing your money down the toliet.
Rubbish. The player will still lose far more money with gambling cost losses than what is offset with winnings, which will only be minor in the absolute scheme of things. This is especially true when one gambles every week over the years and decades.
How many people in your social circle do you personally know that have won the Powerball? Exactly. Zero.
I'd rather buy 0DTE call options 😅
The fact lottery winnings is still taxed multiple times from initial prize value and the eventual amount the winner gets. What makes it even worse, if he invest the $600million he ended up with, he yet again pays capital gains taxes. What happened to double taxation not being legal ? The world have moved far beyond double taxation, in this example we are already looking atleast at triple taxation.
Buy RLF on the Swiss market index. Better then the lottery.0.02 CHF a share, will blow up to 0.9CHF before June.
It should be called the Tax on Stupidity.
I used to live in the hood. Watching these addicts coming in day after day so hopeful but constantly losing time after time was depressing. I'd tell them to invest in the stock market or at least Bitcoin in its heyday and I'd get loud laughs. Nobody could ever name a lottery winner with their immediate response of "can't win if you don't play" because they didn't know anybody successful in the stock market.
Florida in the beginning with the state lottery got people hooked on the idea of lottery funds were helping schools. Then the state legislature slashed school funding so there was no benefit to the public with the lottery. In Florida, they're doing daily lotteries three times a day getting more of these addicts coming in more. In my old neighborhood, you'd avoid gas stations and stores around the last 15 minutes of the lottery cut off because of how nasty people would act thinking they were going to win but always lost.
Im pretty sure if u told anyone how much they spent in lottery in thier life time they probably kts.
$10 spent on lotto tickets each and every week over 50 years totals a very significant $26,000.
@@user-kc1tf7zm3b the real said ones could easily double that in shorter time.
@@jahjoeka 100% capital gains? $26k to $52k over 10 years is very easy, without much effort at all.
So, the $26k loss now becomes a $52k loss, due to opportunity costs. This underscores the sheer reality that lottery tickets are the pursuit of morons.
One point about the slot machine payout ratios: they are the lowest of all forms of casino games.
Australia's eight states & territories?? We have six states & ten territories; so how do you come up with 8??
I think you maybe meant six states & territories (as I'd believe only two of the ten territories actually run their own lotteries)
Bloody hell! ‘Australia’s eight states and territories’, which comprise of NSW, VIC, QLD, SA, WA, TAS, ACT and NT, is a perfectly valid, and reasonable statement to make with common everyday speech. Especially for a statement made to an international audience on TH-cam.
Yes, the channel host did not mention the internal territory of Jervis Bay. But, let’s get real for a moment: nearly all Sydneysiders could not point Jervis Bay on the map, with next to nobody ever visiting the federal coastal enclave.
Each ticket gives me an ability to dream for 3 more days 😢
That's what you're buying, and there's nothing wrong with that
That's really why people buy it, it gives them a high.
Dream a little dream and radiate some positivity.
The world needs more of this.
@@Kier4n99 Except when a lotto player spends $10 on tickets every week for 50 years, which totals a very significant $26,000.
At 10:40 is where you are making the false asumption that everyone who plays the lottery is in the same category group and have the same intention/goal. In my case, I am not poor when it comes to my income level. However, I started playing the lottery on a weekly basis in my late 40s. The amount of money I spend would have little or no impact long term if I invested it all. I am age 55 now. I spend this money as a method of having some hope (even if it is false hope). It does give me something to look forward to each week (the chance of winning is worth it to me to spend this money each week). I realize that it is extremely unlikely I will ever win, but the chance is not zero percent chance of winning (and that is why I keep buying lottery tickets each week, as opposed to putting the money into savings/investments (its such a trivial amount of money, that will get absorbed by medical expenses when I get older anyway).
If you play the lottery at $10 a week, for 20 years straight, the total loss is $10,400.
This is an idiotic way to spend and lose $10,400, as it is just not a trivial amount of money for most people.
there was also a work pool that i put into, 10$ a week and 20 of us, so it's just a fun work thing i guess
@@garygarside9782 Over a 50 year work career, this weekly $10 lottery contribution totals a very significant $26,000. How can losing $26,000 be fun at all?
Moreover, with the massive effect of compound interest, $10 saved each and every week, with a 10% interest rate, will amass a staggering *$745,000* after 50 years.
Mr Garside, you need to listen to your accountant more.
@@garygarside9782 *$10* Not ‘10$’, as this is idiotic.
You make a mistake my friend.
The reason people pay $2 for a lottery ticket once a week is because it gives them $2 worth of excitement - which wouldn't be very difficult since it's only a measly $2.
When a person spends an evening gambling at a casino we would like to think that they walk away thinking that they got their money's worth - otherwise they would only do it once.
Wait, the IRS was able to tax 4.5 Trillion USD and somehow the US has a budget deficit?
That’s by design. The budget deficit is in the form of US Treasury bills, an easy investment for the wealthy. Debt servicing is another giant pump to transfer wealth. In a sense it’s the wealthy paying taxes but they retain the right to get it back…with interest.
This wealth transfer can only be undone by taxing the wealthy at 1950s income tax rate AND instituting an annual wealth tax. Without this the US is trending toward economic feudalism, the teaming masses will be wholly dependent on the charitable whims of a small cadre of ultra-wealthy.
canada has lotto max as well
Finally a video on the idiot tax
I call the lottery the "sucker tax."
Payouts are absurd. $2.4 billion?
Gambling is mostly illegal unless you are the government (lottery).
Ponzi schemes are illegal unless you are the government (social security).
32.5% of gross proceeds are added to lottery so where does the money go ?
I don't gamble unless I have good reasons to believe I have an edge but I think this wasn't a very good explanation of why people play the lottery. I think instead of using the dollar amount one should consider the "subjective utility". To those people $2 loss is basically meaningless but even 1 million after taxes is a life changing amount of money for them and their entire family. If one wishes to understand real people, vs hypothetical uber rational Spock like people, then they should consider what both the potential loss and potential gain mean to those people in subjective terms. Losing $2 doesn't even move the subjective needle, if you will, but winning 600 million breaks the needle. Also, in some game theory settings, like in some fairly specific poker situations, the gto move is actually a -ev at face value or from a naive pov but isn't actually -ev when viewed from the correct angle. What I mean is that sometimes a person might make a call, just an example, knowing full well that the call was -ev itself but isn't actually -ev in the long term because the game of poker isn't some static game and when they do hit their hand they have a high probability of a payout that compensates for the loss in ev by calling.
This is the society of the spectacle, and the lottery is pure spectacle, all filler no meat.
I think some of the probability calculations were off. You have to account for the probability of sharing the grand prize which lowers EV. Also the multiplier EV don’t make sense. The x10 multiplier is always going to have the highest EV. Your calculation looks like it is just showing what portion of a ticket’s value that comes from a x10 multiplier which isn’t the context you us it in. I think there are plenty of reasons to criticize the lottery but at the end of the day it’s just a form of entertainment. I’ll over pay for a beer out at a bar because it is fun just like I’ll pay for the fantasy of winning the lotto
Sigh. Much as I hate to rely on fiction, in this case a movie, you really ought to see "Liberty Heights." It is more obviously about pre-integration society in Baltimore, MD, but the plot revolves around a Jewish bookie and real, maybe still living person, Little Melvin. The bookie goes to prison, and Little Melvin simply takes over his territory. In short, gambling was big business, just not legal.
*Mega Millions and Power Lottery does not sponsor this video.*
Most lottery players are low income which funnels money to our tax revenue system but rarely gets to see the benefits in their neighborhoods because who wants to feed the poor and educate children?
The numbers on money spent for tax services as a percentage of tax revenue do not add up
didn't i see that powerball/megamillions begins to make some sense at around $750M?
I am generally in favor of state lotteries. There are plenty of things that we would be better off without. Cigarettes, alcohol, narcotics and gambling are unfortunately something people will continue to consume whether or not it's legal. Alcohol prohibition was tried and it failed. The war on drugs has only introduced more potent drugs such as fentalyl which makes drug overdoses far more common than before the war on drugs began. If you ban these things, organized crime will step in and fill the void. Better for poor people to have credit card debt to the state than cash debt to the sketchy dudes who would otherwise contol the underground gambling scene.
But religion(indoctrination)works...for example islam prohibited gambling and alcohol
Many of the follower practice and believe in it(I'm not Muslim)
Loto-Quebec!
They should update this video to include the Lotto-Max 🎰
Most of the winners come from rural towns, not major cities or poor hoods, where most tickets are purchased.
This cannot be true. As lotto is entirely a game of chance, with no skill involved whatsoever, the winners have to reflect the segments of society which purchase more of these pointless lotto tickets.
It's a tax on naivety, conformism and superstition, so, why not.
You are over thiniking the lottery and I don't think you can really compare the losses to typical gambling activity. It is definitely irrational to play but I don't think that it is as ruinous as ordinary gambling. It will be interesting to see the numbers on how lotteries compares to other forms of gambling in terms of addiction and negative financial effects. Not all economic decisions are rational or intended to be. Sometimes, people just want to play because they want to or just a little hope, even if it is unrealistic.
Can you use ai to generate lottery numbers?
You don’t need ai for that, you can make a random generator on excel
He should have learned how to invest and live with the interest and its passive income.
"because infinity divided by a number is still infinity"
No, it's not. Mathematics and statistics can't be bend for an argument, the concept of infinity is not a number, it cannot be used for operations.
Very informative
Better odds than the American stock market. At least the lottery is real and will actually pay out. I've been in the market since 1997 and it's nothing but a low paying job. It's all lies. The thing that's difficult to understand is the pareto distribution 80% 20%. I believe we're in a pareto inefficient market. I think this is driving the growth of public debt and increasing the wealth of the top 1%. I think the lottery creates hope to offset the negative social impact of the pareto inefficiency.
In the words of my father its a tax on people who cant do math
but is a good way to get stories of people gettin ruined
Lotteries equal idiot taxes 😉
A difference in respect to the negative return on the lottery vs. gambling is the time element:
90% return within a tiny timeframe is a lot more expensive, than loosing half in a couple of days.
I'm fine risking $10 a year on the lottery
The best is having the money been giving to you I nquotes... this will give you all the money and avoid losing the money in 5 years... you will live the rest of your live with no stress.
You: Win
Government: You mean 'we' win(again)...
The house always wins
On the subject of taxation: yes lotteries do pay for public services, but since the people playing lotteries skew to the poorer side on average what this actually means is that the wealthy are getting a tax break and not providing the societal support that they should be, and it’s actually the poor people themselves who are funding social welfare programs.
It’s taking money from the poor so that the rich can horde more of their wealth, essentially.
Some places even write the budget not accounting for this income source. when the lottery money comes in there, it doesn't contribute any extra money to education: the gambling pile replaces part of the tax pile before it goes to the school.
Insightful comment! I work in the Tax sector and all the wealthy customers pay little to none in tax liability in comparison to their income. Mostly because they have tax deductible saving assets and they itemize. The poor people are forced to take the standard deduction because they aren't aware they have a choice otherwise. You are correct the wealthy makes bookoo money and stiffs the government on taxes. Keeps them increasingly wealthy and the poor paying into scams like the lottery trying to be instantly wealthy.
even worse
our lottery is privately owned
Me again. Stuff the patronizing, ooh, the hoi poloi waste money on lottery tickets. It's a hobby, same as stamp collecting or skiing.
Lottery: (noun) A tax on people who are bad at maths.
Lottery = Old mafia numbers game. Anyways, I actually know someone who won the lottery twice all by themself. Millions. Once made public, women from his past came out and forced DNA tests LOL seriously. He had to pay back 6 figures to two women. Bought about 20 vehicles, daily visits to the casino. Now, so broke, owns nothing, has no where to live and nothing to show for it.
48% expected return, 50% or less payout lump sum, 30% tax, so expected payout is about -83%, and if you win, you are very likely to blow it all and be poor again in a few years.
Not just poor but likely with a thoroughly ruined social network. Winners will often quickly gather a circle of money-hungry “friends”. Existing friendships often get strained by the presence of excessive money. Winners sometimes even sabotage relationships by offering money.
There are some jackpot winners who lose their heads completely and fall into criminal circles who have murdered them for a share of the money.
If you play and win your best outcomes are with middling prizes. Nice fiscal boosts but not a life-charging pile of money.
My wife won $11! Out of 300M lottery tickets. Finally, we can buy two drinks worth $10 + $1 straight to the bank.
Many would come out ahead investing in the lottery vs stocks
False. At the chances of winning the Powerball is always functionally zero with every game. Virtually all the many, many millions Powerball players will never win the grand prize in any given year.
If an investor invests their money in a range of quality stocks, this person will always comes out ahead over time, especially over decades.
@@user-kc1tf7zm3b y r u even arguing this 0.00000001% return is better than zero lmao
good take on gambling
I have an innovative way what the government should do: decrease spending!
Sportsbetting is there next venture across the 50 statea