When it comes to gambling of any sort, there is also the truism: ‘The House Always Wins’.  Nobody generally organises a gambling activity for completely altruistic reason, although they may wrap it up and package in such a way.  The National Lottery is a particularly deceitful example of this as a few simple calculations will illustrate this:

  • Started in 1994.
  • Assuming you bought a single £1 ticket every then you have spent in excess of £1100 over 22 years (average suggests much more than this)
  • Camelot would advertise the charitable element, at £28% = £308
  • 12% goes to the state
  • 50% is prize fund. Actually 45% is paid in prizes (which means that on average every participant will only get 45% return on their investment. In reality of course some getting rich beyond their understanding, and majority just get poorer.
  • 10% goes to the organisers and ticket sellers

 

The charitable fund is managed by the government Department for Culture, Media and Sport where 40% is awarded to health, education, environment and charitable causes, 20% to Sports, 20% to Arts and 20% to Heritage.  This is therefore a tax by any other name, and is levied on those who, if it was added to Income Tax instead, would argue they cannot afford it.  It is a bitter pill swallowed on the promise of riches to be won.  Ironically it is a ‘tax’ paid in no small proportion by those who actually do not pay any income tax due to low earnings!

In the year to 31st March 2016, there were £7,595 million tickets sales (Which, if my maths is correct, comes to approx. £3.50 for every eligible player in UK every week).  Or, to put it another way, that is almost equivalent to 50% of what the Leave EU group were arguing we sent to the EU in their £350/week campaign.  It is worth noting that changing basic rate of Income Tax by 1p, would earn £3,900 million is current fiscal year, so the Lottery players are actually funding a 2p rise income tax. (Source: https://www.gov.uk/government/statistics/direct-effects-of-illustrative-tax-changes)

I am not an economist, but I do know that whilst we speak so much about lack of funding for health, schools, social care, no one wants to pay more taxes to fund these things, and woe betide any political party who runs for election on a ticket of tax increases.  But at the same time this lottery ‘tax’ is paid blindly as there is perceived to be something in it for me.

 

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