At The Bottom Of The Lottery Barrel

Here’s a telling indicator of just how bad Illinois’ financial situation is:  the Powerball and Mega Millions lotteries have kicked Illinois out of the games because the state legislature has been unable to agree on a balanced budget.

You read that right.  The Land of Lincoln is such a financial basket case that even the big lotteries won’t have anything to do with the state.  Apparently the lotteries have been talking about pulling the plug on Illinois for years, and they’ve finally decided to do it.

310-million-powerball-ticket-sold-at-mich-gas-station

It’s a significant step on the lotteries’ part, because Illinois reported $99.4 million in Mega Millions sales and $208 million in Powerball sales within the 2016 budget year.  And the loss of the lotteries will be an issue for Illinois from a budget standpoint, too, because 40 percent of the sales revenue goes to fund public schools — and how is the cash-strapped state going to make up the difference?

A spokesman for the Multi-State Lottery Association, which runs the games, said the group “is focused on protecting the integrity of its games and the experience of its players.”

What does that mean, exactly?  It’s kind of weird for the lotteries, which make their money solely by selling tickets to credulous rubes who don’t know or don’t care that the odds of winning are astronomical, to be talking about the “integrity” of their games.  Are they saying they’re afraid that Illinois, in its desperate search for cash, might try to tinker with the games to jury-rig the results, or seize the proceeds if the winner happens to live in Illinois, or decline to hand over the sales revenues?

It’s not entirely clear, but we do know this:  You know you’re really in deep doo-doo when gamblers think you’re too tainted to deal with.   Even the gamblers aren’t willing to gamble on dealing with Illinois.

Heads I Win, Tails You Lose

Here’s another weirdness about Iowa.  In 6 of the 1,681 precincts that caucused last night, Hillary Clinton and Bernie Sanders ended up in a tie and flipped a coin to decide who should get a delegate.  It’s not exactly a rational way to pick a President, is it?

bigstock-coin-flip-5807921But it gets even weirder, because Hillary Clinton won all six of the coin tosses.  What are the odds of winning six coin tosses in a row?  As simple mathematics would reveal, and as several newspapers have reported, Clinton had exactly a one-in-64 chance — or 1.6 percent — of winning all six flips.  Most of us could never dream of winning even two of three coin flips in a row, much less a half dozen.

What kind of coin were they using for these flips, anyway?  Was it of the two-headed variety, or improperly weighted, or did Sanders’ minions fall for the old heads I win, tails you lose trick?

Hillary Clinton may not have fared as well as she wanted in the Iowa caucuses, but she sure lucked out in the coin toss category.  She probably should have bought a PowerBall ticket.

Powerball Dreams, Tax Realities

Many of us went out to buy a Powerball ticket over the last few days.  Why not?  Even a tiny, ridiculously remote chance to win a $1.5 billion jackpot is still . . . a chance to win a $1.5 billion jackpot!  How often does the average Jane or Joe have a chance at such enormous sums of money?  It’s an irresistible temptation.

according-to-math-heres-when-you-should-buy-a-powerball-ticketPart of what you are buying when you purchase a Powerball ticket under these circumstances is a chance to dream.  What would you do with hundreds of millions of dollars?  Would you quit your job, move to your dream location, buy a professional sports team, make each of your relatives a millionaire, stay in the President’s suite at the Ritz and take a champagne bubble bath, buy a Ferrari . . . or something else?  If you literally had more money than you knew what to do with, even the wildest dreams are possible.  I’m guessing that 99.9% of the people who are in the Powerball drawing — even people, like Kish and me, who never play it — have thought something like this at an idle moment:  “I know it’s unlikely that we might win, but what if we did?”  And then the enjoyable dreams begin.

The passing dreams of millions will come crashing to the ground tonight, when the drawing occurs and, presumably, somebody else will win.  It won’t hurt too much, because no one really expected to win, of course, and in any case the opportunity to dream a little about a life-changing cash payout isn’t a bad thing even if the fickle finger of fate passes us by.

Oh, and then there’s the issue of taxes — which are going to take a pretty big bite out of any jackpot.  The cash payout amount will be $930 million ($930 million!) and unless you live in a state where there are no state or local income taxes, or lottery winnings are exempt from such taxes, you’re going to pay federal, state, and local income taxes on that staggering sum.  In New York City, a single winner of the payout would walk away with $579.4 million, and then would pay another $100 million or so in initial federal taxes.

So that $1.5 billion in the headlines would be reduced to $475 million or so.  I guess we could live on that if we had to.