March 16, 2010 • 25 mins
In this episode, Josh and Chuck discuss the history, practices and controversies of lotteries.
Learn more about your ad-choices at https://www.iheartpodcastnetwork.com
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Brought to you by the reinvented two thousand twelve camera.
It's ready. Are you welcome to Stuff you Should Know
from House Stuff Works dot com? Hey, and welcome to
the podcast Josh Clark Chuck Bryant. Stuff you should Know?
(00:20):
You think? It does not sound like a current affair
one of those tabloid shows hard copy? Remember that? Yeah?
Are they still around? I think some of them are, Thankfully,
I don't watch television at four thirty pm. No, you
have a job. I wouldn't know. Yeah. Here in Georgia,
we had this thing called the Hope Grant. I think
(00:41):
we still do. I think so. We're like, if you
keep a B plus average or more uh in high school,
if you graduate with the B plus average and you
can maintain it through college, you get a free ride
to a state school and it's funded by the lountry. Yeah.
That came along after I was there. It was it
was it started actually when I went to college. I
think it was the first year. UM, and they there
(01:03):
have been tons and tons of studies done on who's
going to college, and it's generally white, upper middle class
kids who are benefiting from the Hope scholarship. And then
it's poor minorities who are playing the lotto in effect
putting um white kids through college who who whose parents
could otherwise pay for it. Yeah. A lot of people
(01:23):
have called the attacks on the poor and definitely the
ant the anti robin hood take from the poor and
give to the rich. Should we talk about some stats?
Should get that out of the way. Yeah, I've got
a few for you, josh Um. There is one study
in California where they have shown that the racial and
household income lines match up with how how California is divided.
(01:48):
So sure has that been disputed at all? Yeah? People
are saying they're cooking the books. They'll last questions like
have you played the lottery in the last month, But
they don't say have you bought fifteen scratch off tickets
per day? Yeah, that's a good point, so they don't
really dive in there. I was reading a story I
think from CBS News Texas in two thousand and seven.
They found that um blacks and Hispanics play the lottery
(02:12):
twice as much as whites do, regardless of class. Yes,
and scratch off tickets are apparently the crack cocaine of
lottery in Texas is the first state to offer a
fifty dollar scratch off ticket. Holy cow, you pay fifty
bucks to buy this thing. Have you ever gone on
like a little scratch off bender? I have before, And
when you get into the grips of it, you might
(02:34):
as well be huffing ether. There's no way out. Well,
it's Massachusetts. One third of the calls to the gambling
Addiction hotline or from lottery players. Really, yeah, I don't
play it. I'm surprised it's just a third. Actually. Yeah.
It's like um, alcoholism and beer. You can buy beer,
you can buy liquor, and in a lot of states
(02:55):
you have to buy it from a state store. This
is the same thing. These are state run vice operations, basically, yeah,
pretty much, and their people have a real problem with them.
But you know, the states just making so much cash
off of these things that they aren't really doing a
whole lot about it. Yeah, and here's the other thing.
Before we get on with just what the lottery is,
(03:16):
we should talk about a little more mouthfeasance. Apparently not
very much money at all is going to K through
twelve education. Oh yeah, most lotteries go towards education. That's
how the college. Yeah, it's all going to college. They
said that less than one percent in um, half of
the states that played the lottery go to K to twelve.
(03:36):
And the other hinky thing is they they sell it
to you as a as a benefit for education, like
all over the marketing, but the legislation now many states
are starting to kind of use it for whatever they
want according to their budget, Like in Missouri. When it started,
I think it was like was supposed to go towards education,
and now it's like thirty and they use it for
(03:58):
budget shortfalls and whatever they need, they'll just rewrite the
Law's grim. That's really grim, especially when you consider all
the people who are just blowing cash on scratch off
tickets or lotto tickets and have like real gambling problems. Huh.
So that's the controversy. Uh. And actually this problem goes
back pretty far, right to the sixteenth century, I believe
(04:20):
Florence Ferenz. Yeah, that's where the lotto comes from. And
I think the term lotto is based on lots, like
drawing lots, game of chance, luck. Yes, right, um. And
so the first lotto that anybody is aware of where
there was a cash prize given out was the lotto
deferenze you want to say, uh, And that was again
(04:45):
in the sixteenth century in Italy. Um and in the
US we've always had something of a little bit of
a fever for the lotto, haven't we. Yeah. Apparently the
Colony of Virginia was founded by raise money from lotteries,
and there were two hundred lotteries permitted between seventeen forty
four and the Revolutionary War that funded Rhodes libraries, colleges, bridges, churches. Yeah,
(05:11):
a lot of them were for civic projects, right, yeah, yeah.
And Princeton and Columbia Universities were built on a lot
of money. Did you know that I did in Latin
I can't remember what it's what it is in latin Um,
but the crest for Princeton it translates to Daddy needs
in New Parachutes. And there's some dice on this shield.
(05:35):
I know. If you have fifteen grand you can go
to eBay and buy a lottery ticket with George Washington
signature on it. Sweet, pretty cool, huh. Yeah. So I
had no idea that lotteries were this entrenched in the
founding of our country, all right, Well, they they kind
of fell out of favor I imagine probably in part
because of the temperance movement in the nineteenth century. Temperance uh,
(05:57):
and then in the twentieth century. But the mid twentieth
century lotto fever could not be suppressed. The inoculations ran
out and everybody was like, give me some tickets, and
New Hampshire live the way in nineteen sixty four with
its first state run lottery of the century. I mean,
I don't play the lottery myself at all, but I
definitely see the irresistible lure of a dollar winning you
(06:21):
millions of dollars. I don't know, man, let's just get
this out of the way. Would you want to win
the lottery honestly? Mm hmm. And if so, what's what's
the minimum amount you would have to win to not
just below it? You know, I'm gonna say now, I
wouldn't want to either, because, uh, stress and anxiety and complications.
(06:42):
I'm just I want to make my life, keep it
as simple as possible, and that would do that would
just complicate everything. Oh, it definitely wouldn't. And all kinds
of jerks come out of the woodwork, and yeah, I
think you're kind of like, I don't have an uncle
from Venezuela, right exactly. Well, I guess it's possible this
guy wouldn't. He's saying it was my uncle. So I
get here's some money I should invest in his coffee
(07:04):
bean field, right exactly, or you know, get some Nigerian
general out of trouble via email. Um So, Chuck, I
would not necessarily want to win the lotto either, unless
it was such a vast amount that I couldn't possibly
run through it, and I'd probably go off and travel
or do whatever. Yeah. I'm also one of those jerk
offs who thinks that like, working for your money is
(07:27):
kind of the thing to do. Chuck works sid for
his money. You know, I would feel like I think
I'd be very unfulfilled if someone just gave me a polocash,
right yeah. And that's an excellent point too, because if
you think about it, Let's say you did win a
million dollars. Let's say you one time million dollars, and
we'll get into how that trickles down to almost nothing
by the time it gets into your pocket. But um,
(07:47):
let's say you won ten million dollars and after a
couple of years you've blown through it, right, Yeah, You've
done nothing to earn that money, so therefore you could
never get it back. It was just blind luck. If
you make ten million dollars writing a book or writing
a movie, or in business or in real estate, you
can make that back again. Actually if you if you
blow it all right, because you've done something for it,
(08:08):
You've used your own um wits and in skill, but
with a lot of know it's just a trip to
easy Street that turns out to be hell well, that's
why it appeals to so many people, except for the
hell part. Yeah, you know, and that's why it's people
see it as attacks on the poor because it's like here,
even the scratch off tickets, you know, just a chance
(08:30):
to win like a couple of hundred bucks. It's kind
of sad. At the same time, though, you have to
you have to add a little perspective to it. You
and I don't really play the louder. Like I said,
I've done some like scratch off benders here there, but
nothing more than like five or ten bucks. Right, I've
got an occasional powerball, occasional power I'll admit that, um,
but rarely. But consider this. You and I are um,
(08:52):
upper middle class white guys age eighteen to forty nine.
Pretty much the entire country is based on whatever we want.
All of the focus groups, all the studies, all of
the the pharmaceutical tests, they're based on us, right, Like,
we have it so ridiculously easy that I think it's
entirely possible that we're blinded to why people play the lottery.
(09:14):
If you simply don't have a leg up, if there's
nothing you can do, if you're being kept down economically, socially,
or whatever. Um, there is this promise of I could
really use a couple extra million bucks, and I don't
care if some jackass does come out of the wood
work and says he's my uncle. Like, I think it's
easy to criticize people who play the lottery as stupid, right,
(09:36):
But at the same time, I think that reveals a
misunderstanding of where somebody's coming from. And then, of course
there are just some jackasses who play the lottery because
they're bored or just have or people who do have
a gambling problem. But I think that there is some
promise of a lottery, and I think that the state
(09:57):
praise upon that through their lotteries. Yeah, I mean, it's
easy for us to sit here and say, well, if
you spend a year on scratch off tickets, if you
had invested that in the rath I ra a, then
you could potentially have a retirement account. And it's just
just shut up. Yeah, I've been poor man, and I
can tell you the poor mentality is tough to break
out of. Yes, I was. I was poor at one
(10:18):
point myself. Yeah, it sucks. And I was a lottery
scratch off fiend. Not true. Yeah, So all right, dude,
we really usually our tirades come towards the end. For
some reason, we front loaded this one with let's talk
about how lotteries work. Yes, Josh, if you are playing
a game with fifty balls, let's say fifty ping pong balls,
(10:40):
and each one that says the number your odds of
winning is about sixteen million to one, and if they
just add one ball to that soft balls, it shoots
up to about seventy six million to one. And the
real reason I don't play that is a fantastic calculation.
And you just did there. But and I don't mean
(11:02):
to criticize you, a surprisingly simple one, actually, right, So,
if you have six numbers that you have to pick
out of fifty balls, your initial chance is uh fifty
to six or it's like I think at eight point
three to one, right, and you can go on down
the line. After one ball is picked, do you have
a forty nine to five chance? And so on and
so on. So if you take you to these and
multiply them, that's where you get that sixteen million to
(11:25):
one chance. Because they don't play lotteries with one ball
if they If they did, then what would that be
a one to one chance? Especially if it was just
one number and they told you at a time the
winning numbers is going to be six lottery? Um? So
the yeah, you've also got power balls, right, which is
are multi state lotteries where everybody joins together. Um. And
(11:47):
the most common one is you have to pick five
numbers from a set of fifty balls. So use that
calculation I just said, Um, But then you also have
to pick one powerball number out of thirty six. Then
you multiply that original calculation by thirty six, and you're
up to seventies six point to seven, five million to one. Chance. Yeah,
(12:08):
And like I said, that's why I don't play the
lottery for real. I just I would never ever, ever
win it, so I'd rather spend that dollar on whatever, cigarettes, beef,
jerky anything. Yeah, chuck, Josh, have you ever noticed that, UM,
when you say win ten million dollars, what you actually
(12:29):
end up with is like two point five million? Just
tick y'all. Yeah, well, it depends you're talking about. UM.
You can eat. You can choose either lumps on payment
or pay me out over the next whatever twenty five years.
I think it usually is. Yeah, it looks like from
from this article the best one to go with if
your patient is the UM series of annual payments or annuity.
(12:53):
I disagree. Okay, Well, I mean I would think you
could make you get about a five pc interest return
that way, and I think if you have half a brain,
you can get a better return than that by investing
that money. And also I think if you die, doesn't
that it's not like they start paying your next of
ken or anything, right, No, they do everywhere. Oh yeah,
it's been a lot of windfall. Becomes part of your estate. Okay.
(13:18):
And actually, since you bring that up, there's a little
bit of advice. If you ever do win a major
lottery or any a lotto. Uh, the first thing you
want to do is sign the ticket because it's a
bearer instrument and whoever has it he turns it in
is the winner. So you want to sign it. Uh.
The next thing you want to do is go talk
to a lawyer before you go into turn in your ticket.
(13:40):
Go get a lawyer. Yeah, you don't want to be
standing on the stage with the big check without having
like an accountant and a lawyer by your side, right,
And the lawyer is gonna set set up a trust
in a state all sorts of other stuff, and then
you go in and you claim your winnings and the
lawyer is gonna take a chunk. The lawyer is gonna
take a chunk, but not as much as Uncle Sam. Huh. Yeah,
(14:00):
well that's just the case with everything. Uh. Of course,
Uncle Sam's gonna take a time about twenty percent in
federal taxes unless you win millions of dollars, and it's
gonna shoot up to thirty nine percent, which is the
highest tax bracket, and then add state and locals and
you'll get about half of your money. And then if
you choose a lumps some you get less anyway, So,
(14:21):
like you said, a ten million dollar lumps on payment
after taxes would be about two and a half a MILLI.
But you're done. That's the way I would want to
do it. You are done with the annuitized payments, right
you you're basically getting uh you start I think at
what one percent? Yeah, and it goes up a little
bit each each goes up a tenth of a percent
(14:43):
each year. So you start off if you win ten
million bucks, you start off with two fifty k, and
then the last payment turns out to be five K,
and you get this check every year. UM. And the
way that this is paid for there's the lottery is
not just like we're sitting on this pile of cash.
They couldn't do that. And what they do actually is
(15:04):
they deal with UM bond agents, bond brokers, and they
buy zero coupon bonds. Right, so like you have a
set price that you're paying for him that day, and
in one year or ten years or whatever, this thing
is going to be worth a specified amount of money. Right,
So like in ten years, if you bought a two
d and sixty dollar bond I'm sorry, twenty five years,
(15:26):
that would be about a thousand dollars. That's how that works,
and what what the lotto does is they contact about
usually seven bond dealers to find out who has the
best rates, and they um, they purchase a package of
twenty five bonds to cover your payout right, and then
once the bond matures, they get the money, they transfer
(15:46):
it to you and you get a check done done.
Pretty interesting and that usually ends up costing them this
package of bonds about half of the jackpot, which is
about what you get when you get a lump sum.
So it doesn't really matter to them either way. Yeah,
thin they said about the people choose the lumps some
I can. I'm not surprised by that at all. Yeah.
And Georgia, actually, I know there's other states too, has
(16:07):
one of those win for life deals where there is
no lumps on. You get like fifty dollars a year
for thirty years or something like that, and that's the prize.
There's no like wiggle room and how you accept it. Yeah,
other states give you a choice. No, no, No No, win
for life is a specific game. Oh it is, okay, Yeah,
so like if you play win for life, that that's
your prize. Well, some states don't give you a choice.
(16:28):
They're like we give out lump sum or we give
out a new attize or you can choose, but when
you choose, you have to choose when you buy the
lotto ticket. Yeah. I think New York you got to
choose when you buy it, but most other states is
like once you've won it, they let you choose. Pretty cool. Yeah, um, chuck,
did you know that there's two types of lotto machines?
I do now, Yeah, I didn't before. Yeah. I think
(16:51):
all I've ever seen as the air mixed machines. Same here.
I think that's what they use on Channel two Action News.
I know that dude, by the way, do you what's
his name, John Crow? He's an old old friend of
mine from TV production and he was picked as the
lottery lottery guy and it looks really good and dress
uh you mean dressed up. Yeah. Yeah, he's a nice guy. Yeah.
(17:12):
And he's a nice guy using air mix machine. Right,
And that is the one where you see the ping
pong balls floating around and the air it's yeah. And
then they opened the little door and one at a time,
the little ping pong ball slides up the shoot always visible.
That's key. You can never have a ping pong ball
go through a tube that you can't see through. That's
(17:35):
bad news is it doesn't inspire confidence. And you'll also
notice that all lot of drawings are live, which is
kind of a big thing too, very important. I mean,
you suspect they're live. I guess if you don't believe
that the moon landing was real, you probably aren't buying
that the lot of drawings are live. Yeah, we should
mention a couple of other security measures. Um and or again.
(17:57):
It's actually overseen by the state police and the detect
the attends each drawing. I thought that was pretty cool.
Balls are usually weighed ahead of time. Why before and after?
Why are we gonna talk about Pennsylvania? Let's do it
all right? The trimple six fix is what it's called.
John Travolta in nineteen eighty John Travolta was it a movie?
(18:19):
I can't remember. I think it was What You Got
to Do with It? Then he was in a movie
about it, Okay, but I think it was loosely based
on the I don't think it was like a depiction
of that. Yeah. Famously, in nineteen eighty, the Pennsylvania lottery
was rigged by a masterminded not well because he got
caught by a guy named Nick Perry, he was the
John Crow of Pennsylvania at the time. He was the announcer,
(18:43):
and he got together with an art director and said, hey, dude,
can you figure out a way to wait these balls
except for three of them, I'm sorry, two of them
four and six, And that way we know that only
combinations of four six will come up. And I think
there's eight combinations and a triple digit drawing. And they
did it, but they, you know, they got greedy and
(19:04):
got caught. Was the art director named Phoebe Buffet, No
she in the Trivalta movie. His name was Joseph Buck
and he was pinched along with Perry and then some
other people they had in on the scan that lingo.
They basically they ended up that the cops were alerted
to the fact that there was a very skewed amount
(19:25):
of numbers bought for six and four and when it
came up six six six, and they had all these
people clamoring for winnings, they went, we should look into this.
I think that just the fact that it came up
six six six alone should raised a few eyebrows, right,
that's the number of the beast josh Uh and so
he you know, they were. They were tried and convicted,
and Perry I think some of the other guys sold
(19:46):
him out and he went to jail just for a
couple of years, then the Halfway house, and then he
was on probation. So not a very big deal for him.
I guess did he get to keep the money? No, No,
they got all that back. Okay, So yeah, they're using
an air mixed machine, and since then, air mixed machines
are still used. Obviously they use them. Your buddy uses
(20:09):
it on the news. Um, but machine, Oh it isn't okay. Uh,
he doesn't take it home and polish it at night
before bed. No, but we could get a scam together
with him. We should try it. Oh. Anyway, The other
type of lotto machine that's generally used that's viewed as
(20:29):
more secure, largely because of that scam, uh, is the
gravity pick lotto machine. Right. How does that thing work? Well?
It uses like kind of rubbery balls that are heavy
with two paddles that spinning opposite directions that mix the balls. Right,
there's no air involved, there's no ping pong balls, there's
no waiting the balls, and other than that, it's virtually
(20:50):
the same thing as an an air pick ball. This
is an optical sensor, so it's high tech. And then bam,
six numbers, one after the other, and if you want,
if you pick them you want. I imagine, like I said,
I don't play, I don't even want to win, but
I imagine that's a very surreal moment when you look
down at your ticket, because there's all those numbers. It
(21:11):
would just I bet it's really difficult for your brain
to really see that and except that that's what it's seeing. Yeah,
we used to when I worked at in New Jersey
at the restaurant, we used to pull That's really the
only time I ever played that much. We'd pull our money,
the waiters would, and we'd buy like a hundred tickets.
You know, you're throwing five dollars and I'll agree to
split it and you know, buy the restaurant and burn
(21:31):
it down if we want that kind of thing. Was Kelly,
uh No, no, No No, this is a New Jersey at
the store. Did Yeah, that's it. Well, if you want
to read about lottos, and we also have an article
called how to Play the Lottery, Tips and Guidelines, it's
pretty in depth, didn't it. I didn't read that one.
Did you really in depth? Other tips? Yeah? What what
(21:54):
kind of tips could there be? Well, there's like wheeling tracking,
like basically paying attention to numbers. How different people doing
pooling is is one thing. How many members there should
be in a pool if it's a private pool, and
then more than fifteen. If it's a largely commercial pool,
no more than a hundred. Make sure that you're the
people who are organizing it are reputable, etcetera, etcetera. I
(22:15):
bet that could get messy. Look at these spreadsheets. Yeah. So,
if you are interested in playing the lotto and you
want some tips and tricks, we won't judge. You know,
you can type in lotteries on how stuff Works dot
Com in the handy search bar, and there you will
also find, in my experience, the first time I've ever
seen the phrase hotter than a two dollar pistol used
(22:37):
in an article on the site. You'll find that by
typing lottery in the handy search bar how stuffworks dot Com,
which brings us, of course, to listener mail this indeed,
herr Clark, Uh, this is I'm just gonna call this UM.
I can't believe this happened. Email. This is from Ben
(22:57):
and Megan, and they said this. My wife and I
married in Las Vegas recently and one of those amazing
Las Vegas chapels. It wasn't a tequila inspired spur of
the moment sort of thing. We planned it for several
months and you guys actually played a part in our evening.
Oh yeah, you remember this one. I can't believe this.
Uh to explain, before we left, I had crafted a
perfect wedding night playlist of my iPod. I've also added
(23:20):
several of your podcast to listen to on the flight.
Because he's a big, tall guy and he hates to fly,
so apparently we helped that. After the ceremony, What what
is he being tall had to do with hating to fly? Well,
he says he gets really uncomfortable in the seat in
our podcast forget, So he's not afraid of flying because
he's taller, and I'm just grant. So after the ceremony
(23:41):
and dinner, we retreated to our lux sweet in the
Trump Hotel, ordered a bottle of champa, queued up the
playlist on my iPod, and plugged into the room stereo
and slipped into the inn room. JACUZI first up Al Green,
then Solomon Burke, Cat Power, Elvis Costello, and then Chosh
and Chuck introducing the Stuff you Should Know podcasts. It's
(24:04):
not any worse than Cat Power, that's true. I hadn't
realized the shuffle feature would shuffle everything on the iPod,
not only the songs. Just in case you're wondering, we
actually let it play. And that's a story of how
you two took part in our wedding night. I believe
that makes us your official Stuff you Should Know podcast
newlyweds ps. Was it good for you? That's awesome. The
(24:26):
only way that story could be better is if they
conceived during one of our podcasts and it was the
show on like Lobotomies. Yeah, in Utah, we'd have legal
claim on that. Baby. If you have an awesome wedding
nights story, now, actually, you guys just keep that to yourself. Ag. Yeah.
If you have a story about winning the lottery and
(24:47):
how it either uplifted your life, ruined your life, or
made you cognizant of the phrase hotter than a two
dollar pistol, put in an email and send it to
Stuffed podcast at how Stuff Works dot on for more
on this and thousands of other topics. Visit how stuff
works dot com. Want more how stuff works, check out
(25:11):
our blogs on the house. Stuff works dot Com home
page brought to you by the reinvented two thousand twelve camera.
It's ready, are you
Brought to you by the reinvented two thousand twelve camera.
It's ready. Are you welcome to Stuff you Should Know
from House Stuff Works dot com? Hey, and welcome to
the podcast Josh Clark Chuck Bryant. Stuff you should Know?
(00:20):
You think? It does not sound like a current affair
one of those tabloid shows hard copy? Remember that? Yeah?
Are they still around? I think some of them are, Thankfully,
I don't watch television at four thirty pm. No, you
have a job. I wouldn't know. Yeah. Here in Georgia,
we had this thing called the Hope Grant. I think
(00:41):
we still do. I think so. We're like, if you
keep a B plus average or more uh in high school,
if you graduate with the B plus average and you
can maintain it through college, you get a free ride
to a state school and it's funded by the lountry. Yeah.
That came along after I was there. It was it
was it started actually when I went to college. I
think it was the first year. UM, and they there
(01:03):
have been tons and tons of studies done on who's
going to college, and it's generally white, upper middle class
kids who are benefiting from the Hope scholarship. And then
it's poor minorities who are playing the lotto in effect
putting um white kids through college who who whose parents
could otherwise pay for it. Yeah. A lot of people
(01:23):
have called the attacks on the poor and definitely the
ant the anti robin hood take from the poor and
give to the rich. Should we talk about some stats?
Should get that out of the way. Yeah, I've got
a few for you, josh Um. There is one study
in California where they have shown that the racial and
household income lines match up with how how California is divided.
(01:48):
So sure has that been disputed at all? Yeah? People
are saying they're cooking the books. They'll last questions like
have you played the lottery in the last month, But
they don't say have you bought fifteen scratch off tickets
per day? Yeah, that's a good point, so they don't
really dive in there. I was reading a story I
think from CBS News Texas in two thousand and seven.
They found that um blacks and Hispanics play the lottery
(02:12):
twice as much as whites do, regardless of class. Yes,
and scratch off tickets are apparently the crack cocaine of
lottery in Texas is the first state to offer a
fifty dollar scratch off ticket. Holy cow, you pay fifty
bucks to buy this thing. Have you ever gone on
like a little scratch off bender? I have before, And
when you get into the grips of it, you might
(02:34):
as well be huffing ether. There's no way out. Well,
it's Massachusetts. One third of the calls to the gambling
Addiction hotline or from lottery players. Really, yeah, I don't
play it. I'm surprised it's just a third. Actually. Yeah.
It's like um, alcoholism and beer. You can buy beer,
you can buy liquor, and in a lot of states
(02:55):
you have to buy it from a state store. This
is the same thing. These are state run vice operations, basically, yeah,
pretty much, and their people have a real problem with them.
But you know, the states just making so much cash
off of these things that they aren't really doing a
whole lot about it. Yeah, and here's the other thing.
Before we get on with just what the lottery is,
(03:16):
we should talk about a little more mouthfeasance. Apparently not
very much money at all is going to K through
twelve education. Oh yeah, most lotteries go towards education. That's
how the college. Yeah, it's all going to college. They
said that less than one percent in um, half of
the states that played the lottery go to K to twelve.
(03:36):
And the other hinky thing is they they sell it
to you as a as a benefit for education, like
all over the marketing, but the legislation now many states
are starting to kind of use it for whatever they
want according to their budget, Like in Missouri. When it started,
I think it was like was supposed to go towards education,
and now it's like thirty and they use it for
(03:58):
budget shortfalls and whatever they need, they'll just rewrite the
Law's grim. That's really grim, especially when you consider all
the people who are just blowing cash on scratch off
tickets or lotto tickets and have like real gambling problems. Huh.
So that's the controversy. Uh. And actually this problem goes
back pretty far, right to the sixteenth century, I believe
(04:20):
Florence Ferenz. Yeah, that's where the lotto comes from. And
I think the term lotto is based on lots, like
drawing lots, game of chance, luck. Yes, right, um. And
so the first lotto that anybody is aware of where
there was a cash prize given out was the lotto
deferenze you want to say, uh, And that was again
(04:45):
in the sixteenth century in Italy. Um and in the
US we've always had something of a little bit of
a fever for the lotto, haven't we. Yeah. Apparently the
Colony of Virginia was founded by raise money from lotteries,
and there were two hundred lotteries permitted between seventeen forty
four and the Revolutionary War that funded Rhodes libraries, colleges, bridges, churches. Yeah,
(05:11):
a lot of them were for civic projects, right, yeah, yeah.
And Princeton and Columbia Universities were built on a lot
of money. Did you know that I did in Latin
I can't remember what it's what it is in latin Um,
but the crest for Princeton it translates to Daddy needs
in New Parachutes. And there's some dice on this shield.
(05:35):
I know. If you have fifteen grand you can go
to eBay and buy a lottery ticket with George Washington
signature on it. Sweet, pretty cool, huh. Yeah. So I
had no idea that lotteries were this entrenched in the
founding of our country, all right, Well, they they kind
of fell out of favor I imagine probably in part
because of the temperance movement in the nineteenth century. Temperance uh,
(05:57):
and then in the twentieth century. But the mid twentieth
century lotto fever could not be suppressed. The inoculations ran
out and everybody was like, give me some tickets, and
New Hampshire live the way in nineteen sixty four with
its first state run lottery of the century. I mean,
I don't play the lottery myself at all, but I
definitely see the irresistible lure of a dollar winning you
(06:21):
millions of dollars. I don't know, man, let's just get
this out of the way. Would you want to win
the lottery honestly? Mm hmm. And if so, what's what's
the minimum amount you would have to win to not
just below it? You know, I'm gonna say now, I
wouldn't want to either, because, uh, stress and anxiety and complications.
(06:42):
I'm just I want to make my life, keep it
as simple as possible, and that would do that would
just complicate everything. Oh, it definitely wouldn't. And all kinds
of jerks come out of the woodwork, and yeah, I
think you're kind of like, I don't have an uncle
from Venezuela, right exactly. Well, I guess it's possible this
guy wouldn't. He's saying it was my uncle. So I
get here's some money I should invest in his coffee
(07:04):
bean field, right exactly, or you know, get some Nigerian
general out of trouble via email. Um So, Chuck, I
would not necessarily want to win the lotto either, unless
it was such a vast amount that I couldn't possibly
run through it, and I'd probably go off and travel
or do whatever. Yeah. I'm also one of those jerk
offs who thinks that like, working for your money is
(07:27):
kind of the thing to do. Chuck works sid for
his money. You know, I would feel like I think
I'd be very unfulfilled if someone just gave me a polocash,
right yeah. And that's an excellent point too, because if
you think about it, Let's say you did win a
million dollars. Let's say you one time million dollars, and
we'll get into how that trickles down to almost nothing
by the time it gets into your pocket. But um,
(07:47):
let's say you won ten million dollars and after a
couple of years you've blown through it, right, Yeah, You've
done nothing to earn that money, so therefore you could
never get it back. It was just blind luck. If
you make ten million dollars writing a book or writing
a movie, or in business or in real estate, you
can make that back again. Actually if you if you
blow it all right, because you've done something for it,
(08:08):
You've used your own um wits and in skill, but
with a lot of know it's just a trip to
easy Street that turns out to be hell well, that's
why it appeals to so many people, except for the
hell part. Yeah, you know, and that's why it's people
see it as attacks on the poor because it's like here,
even the scratch off tickets, you know, just a chance
(08:30):
to win like a couple of hundred bucks. It's kind
of sad. At the same time, though, you have to
you have to add a little perspective to it. You
and I don't really play the louder. Like I said,
I've done some like scratch off benders here there, but
nothing more than like five or ten bucks. Right, I've
got an occasional powerball, occasional power I'll admit that, um,
but rarely. But consider this. You and I are um,
(08:52):
upper middle class white guys age eighteen to forty nine.
Pretty much the entire country is based on whatever we want.
All of the focus groups, all the studies, all of
the the pharmaceutical tests, they're based on us, right, Like,
we have it so ridiculously easy that I think it's
entirely possible that we're blinded to why people play the lottery.
(09:14):
If you simply don't have a leg up, if there's
nothing you can do, if you're being kept down economically, socially,
or whatever. Um, there is this promise of I could
really use a couple extra million bucks, and I don't
care if some jackass does come out of the wood
work and says he's my uncle. Like, I think it's
easy to criticize people who play the lottery as stupid, right,
(09:36):
But at the same time, I think that reveals a
misunderstanding of where somebody's coming from. And then, of course
there are just some jackasses who play the lottery because
they're bored or just have or people who do have
a gambling problem. But I think that there is some
promise of a lottery, and I think that the state
(09:57):
praise upon that through their lotteries. Yeah, I mean, it's
easy for us to sit here and say, well, if
you spend a year on scratch off tickets, if you
had invested that in the rath I ra a, then
you could potentially have a retirement account. And it's just
just shut up. Yeah, I've been poor man, and I
can tell you the poor mentality is tough to break
out of. Yes, I was. I was poor at one
(10:18):
point myself. Yeah, it sucks. And I was a lottery
scratch off fiend. Not true. Yeah, So all right, dude,
we really usually our tirades come towards the end. For
some reason, we front loaded this one with let's talk
about how lotteries work. Yes, Josh, if you are playing
a game with fifty balls, let's say fifty ping pong balls,
(10:40):
and each one that says the number your odds of
winning is about sixteen million to one, and if they
just add one ball to that soft balls, it shoots
up to about seventy six million to one. And the
real reason I don't play that is a fantastic calculation.
And you just did there. But and I don't mean
(11:02):
to criticize you, a surprisingly simple one, actually, right, So,
if you have six numbers that you have to pick
out of fifty balls, your initial chance is uh fifty
to six or it's like I think at eight point
three to one, right, and you can go on down
the line. After one ball is picked, do you have
a forty nine to five chance? And so on and
so on. So if you take you to these and
multiply them, that's where you get that sixteen million to
(11:25):
one chance. Because they don't play lotteries with one ball
if they If they did, then what would that be
a one to one chance? Especially if it was just
one number and they told you at a time the
winning numbers is going to be six lottery? Um? So
the yeah, you've also got power balls, right, which is
are multi state lotteries where everybody joins together. Um. And
(11:47):
the most common one is you have to pick five
numbers from a set of fifty balls. So use that
calculation I just said, Um, But then you also have
to pick one powerball number out of thirty six. Then
you multiply that original calculation by thirty six, and you're
up to seventies six point to seven, five million to one. Chance. Yeah,
(12:08):
And like I said, that's why I don't play the
lottery for real. I just I would never ever, ever
win it, so I'd rather spend that dollar on whatever, cigarettes, beef,
jerky anything. Yeah, chuck, Josh, have you ever noticed that, UM,
when you say win ten million dollars, what you actually
(12:29):
end up with is like two point five million? Just
tick y'all. Yeah, well, it depends you're talking about. UM.
You can eat. You can choose either lumps on payment
or pay me out over the next whatever twenty five years.
I think it usually is. Yeah, it looks like from
from this article the best one to go with if
your patient is the UM series of annual payments or annuity.
(12:53):
I disagree. Okay, Well, I mean I would think you
could make you get about a five pc interest return
that way, and I think if you have half a brain,
you can get a better return than that by investing
that money. And also I think if you die, doesn't
that it's not like they start paying your next of
ken or anything, right, No, they do everywhere. Oh yeah,
it's been a lot of windfall. Becomes part of your estate. Okay.
(13:18):
And actually, since you bring that up, there's a little
bit of advice. If you ever do win a major
lottery or any a lotto. Uh, the first thing you
want to do is sign the ticket because it's a
bearer instrument and whoever has it he turns it in
is the winner. So you want to sign it. Uh.
The next thing you want to do is go talk
to a lawyer before you go into turn in your ticket.
(13:40):
Go get a lawyer. Yeah, you don't want to be
standing on the stage with the big check without having
like an accountant and a lawyer by your side, right,
And the lawyer is gonna set set up a trust
in a state all sorts of other stuff, and then
you go in and you claim your winnings and the
lawyer is gonna take a chunk. The lawyer is gonna
take a chunk, but not as much as Uncle Sam. Huh. Yeah,
(14:00):
well that's just the case with everything. Uh. Of course,
Uncle Sam's gonna take a time about twenty percent in
federal taxes unless you win millions of dollars, and it's
gonna shoot up to thirty nine percent, which is the
highest tax bracket, and then add state and locals and
you'll get about half of your money. And then if
you choose a lumps some you get less anyway, So,
(14:21):
like you said, a ten million dollar lumps on payment
after taxes would be about two and a half a MILLI.
But you're done. That's the way I would want to
do it. You are done with the annuitized payments, right
you you're basically getting uh you start I think at
what one percent? Yeah, and it goes up a little
bit each each goes up a tenth of a percent
(14:43):
each year. So you start off if you win ten
million bucks, you start off with two fifty k, and
then the last payment turns out to be five K,
and you get this check every year. UM. And the
way that this is paid for there's the lottery is
not just like we're sitting on this pile of cash.
They couldn't do that. And what they do actually is
(15:04):
they deal with UM bond agents, bond brokers, and they
buy zero coupon bonds. Right, so like you have a
set price that you're paying for him that day, and
in one year or ten years or whatever, this thing
is going to be worth a specified amount of money. Right,
So like in ten years, if you bought a two
d and sixty dollar bond I'm sorry, twenty five years,
(15:26):
that would be about a thousand dollars. That's how that works,
and what what the lotto does is they contact about
usually seven bond dealers to find out who has the
best rates, and they um, they purchase a package of
twenty five bonds to cover your payout right, and then
once the bond matures, they get the money, they transfer
(15:46):
it to you and you get a check done done.
Pretty interesting and that usually ends up costing them this
package of bonds about half of the jackpot, which is
about what you get when you get a lump sum.
So it doesn't really matter to them either way. Yeah,
thin they said about the people choose the lumps some
I can. I'm not surprised by that at all. Yeah.
And Georgia, actually, I know there's other states too, has
(16:07):
one of those win for life deals where there is
no lumps on. You get like fifty dollars a year
for thirty years or something like that, and that's the prize.
There's no like wiggle room and how you accept it. Yeah,
other states give you a choice. No, no, No No, win
for life is a specific game. Oh it is, okay, Yeah,
so like if you play win for life, that that's
your prize. Well, some states don't give you a choice.
(16:28):
They're like we give out lump sum or we give
out a new attize or you can choose, but when
you choose, you have to choose when you buy the
lotto ticket. Yeah. I think New York you got to
choose when you buy it, but most other states is
like once you've won it, they let you choose. Pretty cool. Yeah, um, chuck,
did you know that there's two types of lotto machines?
I do now, Yeah, I didn't before. Yeah. I think
(16:51):
all I've ever seen as the air mixed machines. Same here.
I think that's what they use on Channel two Action News.
I know that dude, by the way, do you what's
his name, John Crow? He's an old old friend of
mine from TV production and he was picked as the
lottery lottery guy and it looks really good and dress
uh you mean dressed up. Yeah. Yeah, he's a nice guy. Yeah.
(17:12):
And he's a nice guy using air mix machine. Right,
And that is the one where you see the ping
pong balls floating around and the air it's yeah. And
then they opened the little door and one at a time,
the little ping pong ball slides up the shoot always visible.
That's key. You can never have a ping pong ball
go through a tube that you can't see through. That's
(17:35):
bad news is it doesn't inspire confidence. And you'll also
notice that all lot of drawings are live, which is
kind of a big thing too, very important. I mean,
you suspect they're live. I guess if you don't believe
that the moon landing was real, you probably aren't buying
that the lot of drawings are live. Yeah, we should
mention a couple of other security measures. Um and or again.
(17:57):
It's actually overseen by the state police and the detect
the attends each drawing. I thought that was pretty cool.
Balls are usually weighed ahead of time. Why before and after?
Why are we gonna talk about Pennsylvania? Let's do it
all right? The trimple six fix is what it's called.
John Travolta in nineteen eighty John Travolta was it a movie?
(18:19):
I can't remember. I think it was What You Got
to Do with It? Then he was in a movie
about it, Okay, but I think it was loosely based
on the I don't think it was like a depiction
of that. Yeah. Famously, in nineteen eighty, the Pennsylvania lottery
was rigged by a masterminded not well because he got
caught by a guy named Nick Perry, he was the
John Crow of Pennsylvania at the time. He was the announcer,
(18:43):
and he got together with an art director and said, hey, dude,
can you figure out a way to wait these balls
except for three of them, I'm sorry, two of them
four and six, And that way we know that only
combinations of four six will come up. And I think
there's eight combinations and a triple digit drawing. And they
did it, but they, you know, they got greedy and
(19:04):
got caught. Was the art director named Phoebe Buffet, No
she in the Trivalta movie. His name was Joseph Buck
and he was pinched along with Perry and then some
other people they had in on the scan that lingo.
They basically they ended up that the cops were alerted
to the fact that there was a very skewed amount
(19:25):
of numbers bought for six and four and when it
came up six six six, and they had all these
people clamoring for winnings, they went, we should look into this.
I think that just the fact that it came up
six six six alone should raised a few eyebrows, right,
that's the number of the beast josh Uh and so
he you know, they were. They were tried and convicted,
and Perry I think some of the other guys sold
(19:46):
him out and he went to jail just for a
couple of years, then the Halfway house, and then he
was on probation. So not a very big deal for him.
I guess did he get to keep the money? No, No,
they got all that back. Okay, So yeah, they're using
an air mixed machine, and since then, air mixed machines
are still used. Obviously they use them. Your buddy uses
(20:09):
it on the news. Um, but machine, Oh it isn't okay. Uh,
he doesn't take it home and polish it at night
before bed. No, but we could get a scam together
with him. We should try it. Oh. Anyway, The other
type of lotto machine that's generally used that's viewed as
(20:29):
more secure, largely because of that scam, uh, is the
gravity pick lotto machine. Right. How does that thing work? Well?
It uses like kind of rubbery balls that are heavy
with two paddles that spinning opposite directions that mix the balls. Right,
there's no air involved, there's no ping pong balls, there's
no waiting the balls, and other than that, it's virtually
(20:50):
the same thing as an an air pick ball. This
is an optical sensor, so it's high tech. And then bam,
six numbers, one after the other, and if you want,
if you pick them you want. I imagine, like I said,
I don't play, I don't even want to win, but
I imagine that's a very surreal moment when you look
down at your ticket, because there's all those numbers. It
(21:11):
would just I bet it's really difficult for your brain
to really see that and except that that's what it's seeing. Yeah,
we used to when I worked at in New Jersey
at the restaurant, we used to pull That's really the
only time I ever played that much. We'd pull our money,
the waiters would, and we'd buy like a hundred tickets.
You know, you're throwing five dollars and I'll agree to
split it and you know, buy the restaurant and burn
(21:31):
it down if we want that kind of thing. Was Kelly,
uh No, no, No No, this is a New Jersey at
the store. Did Yeah, that's it. Well, if you want
to read about lottos, and we also have an article
called how to Play the Lottery, Tips and Guidelines, it's
pretty in depth, didn't it. I didn't read that one.
Did you really in depth? Other tips? Yeah? What what
(21:54):
kind of tips could there be? Well, there's like wheeling tracking,
like basically paying attention to numbers. How different people doing
pooling is is one thing. How many members there should
be in a pool if it's a private pool, and
then more than fifteen. If it's a largely commercial pool,
no more than a hundred. Make sure that you're the
people who are organizing it are reputable, etcetera, etcetera. I
(22:15):
bet that could get messy. Look at these spreadsheets. Yeah. So,
if you are interested in playing the lotto and you
want some tips and tricks, we won't judge. You know,
you can type in lotteries on how stuff Works dot
Com in the handy search bar, and there you will
also find, in my experience, the first time I've ever
seen the phrase hotter than a two dollar pistol used
(22:37):
in an article on the site. You'll find that by
typing lottery in the handy search bar how stuffworks dot Com,
which brings us, of course, to listener mail this indeed,
herr Clark, Uh, this is I'm just gonna call this UM.
I can't believe this happened. Email. This is from Ben
(22:57):
and Megan, and they said this. My wife and I
married in Las Vegas recently and one of those amazing
Las Vegas chapels. It wasn't a tequila inspired spur of
the moment sort of thing. We planned it for several
months and you guys actually played a part in our evening.
Oh yeah, you remember this one. I can't believe this.
Uh to explain, before we left, I had crafted a
perfect wedding night playlist of my iPod. I've also added
(23:20):
several of your podcast to listen to on the flight.
Because he's a big, tall guy and he hates to fly,
so apparently we helped that. After the ceremony, What what
is he being tall had to do with hating to fly? Well,
he says he gets really uncomfortable in the seat in
our podcast forget, So he's not afraid of flying because
he's taller, and I'm just grant. So after the ceremony
(23:41):
and dinner, we retreated to our lux sweet in the
Trump Hotel, ordered a bottle of champa, queued up the
playlist on my iPod, and plugged into the room stereo
and slipped into the inn room. JACUZI first up Al Green,
then Solomon Burke, Cat Power, Elvis Costello, and then Chosh
and Chuck introducing the Stuff you Should Know podcasts. It's
(24:04):
not any worse than Cat Power, that's true. I hadn't
realized the shuffle feature would shuffle everything on the iPod,
not only the songs. Just in case you're wondering, we
actually let it play. And that's a story of how
you two took part in our wedding night. I believe
that makes us your official Stuff you Should Know podcast
newlyweds ps. Was it good for you? That's awesome. The
(24:26):
only way that story could be better is if they
conceived during one of our podcasts and it was the
show on like Lobotomies. Yeah, in Utah, we'd have legal
claim on that. Baby. If you have an awesome wedding
nights story, now, actually, you guys just keep that to yourself. Ag. Yeah.
If you have a story about winning the lottery and
(24:47):
how it either uplifted your life, ruined your life, or
made you cognizant of the phrase hotter than a two
dollar pistol, put in an email and send it to
Stuffed podcast at how Stuff Works dot on for more
on this and thousands of other topics. Visit how stuff
works dot com. Want more how stuff works, check out
(25:11):
our blogs on the house. Stuff works dot Com home
page brought to you by the reinvented two thousand twelve camera.
It's ready, are you
Stuff You Should Know News
Hosts And Creators
Chuck Bryant
Josh Clark
Show Links
AboutOrder Our BookStoreSYSK ArmyRSSPopular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!