The One Percent Powerball Win

Interesting news from the lottery world, as reported by the Associated Press:

Three asset managers from Connecticut’s affluent New York suburbs claimed a $254 million Powerball jackpot on Monday off a $1 ticket.

Gregg Skidmore, Brandon Lacoff and Tim Davidson came forward as trustees for The Putnam Avenue Family Trust, which they formed after Davidson bought the winning ticket at a Stamford gas station. At least two of them live in Greenwich, one of America’s wealthiest towns.

They will take the after-tax lump sum of nearly $104 million in cash. They say a significant portion will go to charity.

This wasn’t a case of rich guys buying a suitcase full of lottery tickets during a big jackpot.  They just bought the one ticket at a gas station, and their ship came in.  The gas station, incidentally, gets a nice $100,000 bonus for selling the winning ticket.

It’s nice of the Powerball winners to make a big charitable donation, although that probably won’t stave off a bit of tooth grinding from the “income inequality” set.  Class warfare types are always complaining about the unfairness of those who “win life’s lottery,” to quote former congressman Dick Gephardt (D-MO) from over a decade ago.  Now we’ve got guys who won life’s lottery winning the lottery.

On the other hand, these fellows will probably catch less Marxist grief for their $104 million after-tax Powerball payout than for the money they’ve earned through their “small startup asset management firm” in Greenwich, which I’ll wager took a lot more work than driving to the gas station and filling out a Powerball card.  The modern Left is pretty casual about fortunes gained through random “big breaks,” such as lottery wins or show-business super-stardom.  They never tell you to hate pop stars for their eye-popping wealth, even when their “talents” are somewhat difficult to describe.

The Left is also blissfully unconcerned with rising lottery sales, even though they amount to a regressive tax upon an increasingly desperate underclass.  The Chicago Sun-Times ran a piece in September about rising lottery sales:

Financial records for 41 state lotteries that end their fiscal year in June show 28 had higher sales than the year before. Seventeen of those states set all-time sales records.

In Illinois, lottery sales were $2.27 billion in the last fiscal year — July 1, 2010, through June 30, 2011 — up abut 3 percent from the previous year. Some $632 million was transferred to the Common School Fund and $54 million went to the Capital Project Fund, the Illinois lottery said.

Since fiscal year 2007, Illinois lottery sales have increased by more than 11 percent, the state reported.

This has led to some dispute among observers over whether ticket sales rise during hard economic times:

Multiple studies of state lotteries have found that those with low incomes spend a higher percentage of their income on lottery tickets than wealthier individuals. That, combined with the correlation between a bad economy and increased lottery sales, raises questions, said Garrick Blalock, associate professor of economics at Cornell and a co-author of a study on lottery players.

“If what looks like is going on is actually going on, states are solving budget shortfalls with what effectively amounts to a regressive tax on the poor,” said Blalock.

Of course, lottery tickets are a voluntary transaction, not a tax extracted by force.  Nevertheless, they bring in a lot of money, which is usually presented to voters as “earmarked” for education… but money is fungible, and every “earmarked” dollar gives a non-earmarked dollar wings to fly away somewhere else. 

I used to work for a state lottery, many years ago, and I watched people buy huge piles of tickets during big jackpots.  I also saw black market food-stamp-for-cash trades going crazy when the prize passed a hundred million.  I’ve heard impassioned moral arguments against the state sponsorship of large-scale gambling… and I’ve plunked down a buck or two for tickets myself, after hitting the Slurpee machine. 

All of this runs through my mind whenever I notice a bit of interesting lottery news.  I can’t help thinking it’s a shame that the trio from the Putnam Avenue Family Trust will receive far more attention for their wonderful good luck at the gas station than for their far more interesting, challenging, and productive day jobs, at which they have evidently enjoyed considerable success.  Unfortunately, people who earn millions long ago became less interesting to popular culture than people who win millions.