The business with the six correct + additional number – who earns actually at it?
Hit the really big jackpot with a few right crosses and be set for life. Luxury, financial freedom and no more money worries, but that only works with the right numbers and a bit of luck, which of course must also play a role. How with the hopes of millions of people, the billion-dollar lottery business is built, dreaming of a different future with the jackpot you can read in this article. Whether you keep playing after that or become a money hero is up to you!
The "food chain
Who is earning from the game of millions?? So let’s go through the process step by step and see how the whole thing works.
We start at one of the 24 or so.000 lottery retail outlets in Germany, which can be found on virtually every street corner. The suitable advertisement around the people accordingly for the luck play to inspire find you likewise at all strongly frequented places, be it among other things in the supermarket, the bus stop or equal in the entire city area by cab on the way. The scam obviously works, because one in four Germans plays the lottery once a week, even though the chance of winning the really big prize of 1 in 140 million seems almost puny. In addition, one runs the risk of falling prey to gambling addiction.
The first point of contact is the lottery retailer, especially when the jackpot increases, the rush is even greater, everyone wants to try their luck.
"6 out of 49" is the name of the most popular lottery variant, which most people have probably tried at least once when the possible winnings have once again reached astronomical heights.
Especially in times like these, the small revenue shares that a lottery office gets add up neatly due to the sheer mass of players who also want to enjoy a win. About 6% of the play stakes land in such a way into the cashes of the operators.
Behind the data processing and the orderly running of the game is of course one of the 16 state-owned lottery companies, which are also paid for these tasks with 6 percent of the cake. With such a billion dollar business like the Lotto play that is also completely sufficient around the current operating and personnel costs as well as the expenditures for advertisement to cover.
To finance the winnings, almost half, namely 49 percent, of the stakes are used.
The stupid tax
Since the lottery business is strictly regulated and licensed by the state, the state is also happy about the 17 percent annual income from the lottery tax. In expert circles, this tax is also called the stupid tax because the players have only a small chance of winning, but the state profits quite well from it. Here the conditions are not even approximately balanced.
The remaining 22 percent goes to sponsorship projects in sports, culture or any other field, if you apply for it. This is bindingly defined in the so-called State Treaty on Gambling and the lottery companies are bound by it.
So what conclusions can we draw from this?
For operators of lottery sales outlets and the lottery companies, playing the lottery is worthwhile. The state is pleased about additional tax receipts around its budget cash to improve and associations profit from donations of the Lotto companies.
This structure will not change in the future, because the state can keep possible competition out of the market with the gambling monopoly.
What’s left behind are a few lucky winners who often don’t have the financial literacy to handle such sums and are often back to zero in the bank after a few years. The last in the chain are the players who win small amounts every now and then, but in the long run only make a loss.
If you have read this article up to this point, you should ask yourself what added value playing the lottery has for you. The many winnings that you have already received can hardly be it. The thrill? Then visit as an example rather a leisure park and look for the next roller coaster. Together with friends and family you probably got more for your money at the end of the day.
When your body has released enough adrenaline for the time being, deal with the numbers. With which probability I crack the Jackpot and which amount would come out over a longer time horizon thereby if I save my stakes and invest instead meaningfully?
Not only for the handful Lotto millionaires per year, but also for everyone who would like to learn like it its finances in the grasp has, helps you our team of money heroes gladly with your development to sovereign handling money gladly further. Become a money hero and become a member of our community.
Finally, here is an example of where the journey might take us.
Let’s say you save the cost of the weekly lottery ticket and instead put, say, 50 euros into an ETF savings plan that tracks the MSCI World Index. The MSCI World has averaged an 8.5 percent return over 100 years.
Assuming things continue as they are and you stubbornly follow through for 20 years and keep your savings plan going no matter what. Then you have on your account after this time the proud sum of 28.179.86 euros stand. Of this 12.000 euros from your savings installments and 17.920,51 Euro from the increase in value. Another 1740.65 euros will go to the taxman, provided that taxation does not change in the future.
Now you have to admit, though: Did you make 17.920 euros won playing the lottery, or do you know someone who did?? No matter how it turns out, you will most likely have made more money than you did gambling.
Finally take your financial education into your own hands! Here it goes to the basic course of the financial intelligence: Click here
P.S. If you’re a fan of cryptocurrencies, you can play the lottery without losing money. Find out how this works in the article on the protocol "PoolTogether."
About the author:
Marco is a financial intelligence coach and founder of the Geldhelden organization. His vision is to bring financial education to the wider society. With his coaching he helps people to make the right financial decisions and to understand the WHY behind them.