U.S dipping into credit crunch again

[BigPlayer]

Every time someone wins a lottery where exactly does this money comes from?

[Andy]

Every time someone wins a lottery where exactly does this money comes from?

Is this a serious question? It comes from all the tickets that are sold for it surely?

[kidpoker]

as andy said, the US makes a crap ton of money off of the lottery. Millions of tickets are sold each week. I would say for every million that is paid out, the government makes about 300,000 or more. ANd then they tax the hell out of the winners. Then the winners spend a ton of it and put money back into the economy. Most of the time they get the money is payment installments. So since they have that money coming in, they also take out loans to but really nice stuff. Then the banks make money off the interest. If you take the money in one lump sum, say you won a million, you only get 750,000 if you take it in one lump sum. Then they take about 40% out in taxes, so you are left with about 400,000 or less. NONe of this is exact, but you get the point.

[Spooky]

Like Andy said was not sure this was a serious question.
But many lotteries are no different than a pari-mutual system at the racetracks.

Except they take out 50% of the funds for lottery winnings and the other 50% are used to subsidize seniors, schools and other state assistance.

In addition the winnings are then taxed to the winner based on their current tax situation which is entirely separate from what is taken out originally.

There are some lotteries that have a fixed payout. Again it is based on about half of the expected odds. For instance on a Pick 3, the true odds are 999-1 but the states pay out at 500-1 on the dollar. There are a few circumstances that they pay out more then they collect but that usually doesnt happen unless the number that comes out coincides with a favorable number that day.
For example todays date is April 30....so many may play the 430 in the Pick 3.

And in the larger lotteries. The winners are paid in an annuity. So the state keeps the money and just purchases an annuity to pay the winner over a period of time. Although many have an option to just take the current cash value.

[musicbox]

I read the question/heading as 'if we're in a credit crunch, how are people affording to play the lottery?' but maybe I'm completely missing the point!

[Spooky]

Maybe it aint you. Then never mind. lol