Mega Millions Lottery states // Lotteries

Mega Millions Lottery states

"The states come out ahead because of the extra buying, " says Philip Cook, professor of public policy at Duke University in Durham, N.C., and co-author of “Selling Hope: State Lotteries in America."

Much of that extra buying is expected to happen today as the evening's drawing nears. In Massachusetts, for example, local lottery officials predict outlets could sell as much as $10 million in tickets in a single day. Massachusetts represents about 2.5 percent of the lottery's national revenues. If that forecast holds true nationally, then Mega Millions would raise as much as $400 million Friday.

That amount – added to the hundreds of millions from the 18 previous drawings where there was no winner – could push the final amount much higher than the current estimated jackpot.

But the chances of winning remain just as slim, since lotteries have the worst odds of just about any legalized form of gambling.

"Most lotteries return about 50 to 60 percent of all money bet to players as jackpots, " David Schwartz, director of the Center for Gaming Research at the University of Nevada Las Vegas, writes in an e-mail. By contrast, "Nevada casinos, in 2011, returned 92.28 percent."

Even among lotteries, the Mega Millions drawing is at the lower end of the spectrum. Winners get about half the jackpot (whatever cash is accumulated), 15 percent goes for operations and the retailers that sell the tickets, and 35 percent goes to the states.

States often recoup even more money through taxes levied on winnings. The federal tax rate on gambling winnings is 25 percent. Massachusetts levies an additional 5 percent state tax.

Often, states allocate that money for schools. Others use it for local aid. When the lottery revenues are allocated for such large budget areas, their overall impact is small. "Sometimes, voters assume the problem of the funding of the education is solved" with a lottery, Mr. Cook says. "But that does not begin to be enough to make a great deal of difference."

In Illinois, for example, lottery money accounted for only 8 percent of state funding for public schools in fiscal year 2009, according to the Illinois Association of School Boards.

Sometimes, states target lottery money more narrowly so it has a relatively bigger impact. Georgia, for example, uses the money to fund scholarships for students who attend a college or university in the state. "That is a program that would not exist without a lottery, " Cook says.

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Mega Millions jackpot rises to $83 million  — Detroit Free Press
The Mega Millions jackpot has risen to an estimated $83 million for the next drawing in the multistate lottery game.

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