Lottery Suckers

Lottery Suckers
Lottery Suckers - The No. 1 state for lottery suckers

State lotteries have the longest odds of any form of legal gambling. And if you’re from the Peach State, odds are you’re losing more than most.

Georgia's lottery players are the biggest suckers in the nation, according to Bloomberg Rankings, buying nearly $5 billion of the $50 billion a year in tickets for U.S. state-run games that have the worst odds of any form of legal gambling.

Players in Georgia, whose per capita income is about 10% below the U.S. average, are doing the most damage to their personal finances. According to the Sucker Index created by Bloomberg Rankings, Georgia residents spent the second-highest chunk of their income on the lottery, which funds college scholarships and prekindergarten.

Local governments use lotteries to help pay for education, environmental protection and other programs. In the past fiscal year, sales rose for 26 of the 43 states that have games, helping to close budget gaps caused by declines in tax revenue and federal aid. The pot comes disproportionately from lower-income residents, according to a Journal of Behavioral Decision Making study.

"You're taking from those with few means and helping those with more means," Charles Clotfelter, a Duke University economics professor, said from Durham, N.C. "To link that tax revenue to a benefit that goes largely to middle-and upper-class citizens is a little stunning,"

"It's a pro-rich wealth-redistribution technique in Georgia," said Clotfelter, the co-author of "Selling Hope: State Lotteries in America," in a telephone interview.

Sucker Index

Georgia residents spent an average $470.73 on the lottery in 2010, or 1% of their personal income, while they received the sixth-highest prize payouts, 63 cents for each dollar spent, the Sucker Index shows. Only Massachusetts had higher spending, $860.70 per adult, more than three times the U.S. average.

But Georgia's per-capita income of $34,800 in 2010 was below the national average of $39,945, while Massachusetts' was above it, at $51,302, according to data compiled by Bloomberg.

Massachusetts players were the biggest lottery winners, getting back almost 72 cents on the dollar, according to the data compiled by Bloomberg. That state still places second on the Sucker Index because spending as a percentage of personal income is the most, at 1.3%.

New York ranked third in the index, followed by Michigan and South Carolina. The lowest scores went to Oklahoma, Washington, South Dakota, Montana and North Dakota. Alabama, Alaska, Hawaii, Mississippi, Nevada, Utah and Wyoming don't have state lotteries.
Money returned

Bloomberg Rankings created the Sucker Index with 2010 data from the U.S. Census and annual reports from state lottery commissions, which include multistate games. The total dollar amount of prizes awarded was subtracted from ticket sales, and then the difference was divided by the total personal income of each state's residents.

Georgia's lottery law says the state should contribute "as near as practical" to 35% of the proceeds to prekindergarten and Helping Outstanding Pupils Educationally (HOPE) scholarships, which pay full tuition for in-state public and private colleges and technical schools. A share that large was last transferred in 1997, according to a state audit.

Last year, with the lottery-funded programs facing a $300 million deficit and "on the brink of bankruptcy," Gov. Nathan Deal enacted scholarship changes that raised grades and test scores for eligibility, eliminated funding for books and fees and cut payments for remedial classes. He also cut the prekindergarten program to 160 days from 180.

Read More: http://money.msn.com/personal-finance/the-no-1-state-for-lottery-suckers-bloomberg.aspx?gt1=33029

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