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Buying Lottery Tickets and Going to the Casino?

In the early days, I wrote a lot of scolding pieces about spending money foolishly. I cringe reading some of these, but here is something I am still reasonably passionate about. Risk and gambling may be part of financial planning in a small way, but Casinos and buying lottery tickets should not. I wrote this back in 2008.

My wife told me about a new episode of “‘Til Debt Do Us Part” which Gail Vaz-Oxlade hosts, where one of the spouse’s financial tactics to paying off their debt was to go to the Casino and try to make some extra cash (no she wasn’t working there, she was gambling). Other folks I know buy lottery tickets or are part of “groups” buying lottery tickets weekly, hoping to hit it big so that they can retire.

Allow me to be clear on this one, neither of these “Financial Plansare efficacious, nor are they prudent.  My opinion is that if you have reached a point in your life where you feel you must gamble to catch up on your financial obligations, you are in dire need of serious help from some professional.

The Gambling Recovery Plan

If the Canadian Government came up with a plan to take $2B and go to one of the larger casinos in Las Vegas and attempt to double it using a “gambling system,” there would be an armed Coup D’Etat. However, if we hear of friends or family going to the Casino, how many of us stop them? Gambling your money on a hot stock tip, a game of no-limit Texas Hold’em or a pyramid scheme is not the way to recover from a financial setback.

It usually takes time to get yourself into a financial bind, and thus it will take time to get yourself out of the financial hole you are in. There are no quick fixes to financial problems, and if there are, usually you’ll be back in the same financial bind quickly if there was a quick fix (i.e. windfall money appears which helps you out, but you don’t fix the cause of the problem).

The only Gambling Recovery Plan I could think that might be a success is if you are a gambler and you have been blowing your money at the Casino. You decide not to go to the Casino anymore, that plan will succeed (as long as you don’t find somewhere else to squander your money).

The Buying Lottery Tickets Retirement Plan

Having worked in the lottery business many years ago, there are three groups of people who make money on the lottery:

  1. The person that runs the lottery makes the most money, hands down. Governments, however, have made it illegal to run your own lottery, so you can’t make money on lotteries this way.
  2. Printing and distributing lottery tickets is a fairly profitable business (look at Canadian Bank Note, or British American Bank note’s financials in this area), but it is a very small percentage compared to how much the lottery commission makes on a Lottery.
  3. Selling lottery tickets makes stores money, and they get to share in winnings of their customers too, but the sellers don’t make as much as the printers do

Note there is no mention on that list of BUYING lottery tickets as being a way to make money on lotteries.

I realize that most readers of this article know someone (a friend of a friend, or something like that) that Won the Big One in the lottery. That is what the Lottery Commission wants you to remember. You don’t realize that you most likely know of someone who was bitten by a shark or hit by lightning (both more likely occurrences than lottery winning).

If you are spending money on Lottery tickets, figure out how much you are paying yearly. Multiply that amount by 20, and that is the money you’d have in hand (plus interest) if you didn’t buy the lottery tickets (or the Cigarettes, or the Coffee, etc., etc.). Keep that in mind the next time you want to buy an “Early Retirement” lottery ticket.

Do you want a winning bet? Put that money in an RRSP or an RESP, or give it to a Charity, not buying lottery tickets.


Lotteries are not a Financial Service

Just a quick one that I noticed, it seems our friends at Red Flag Deals (I do like checking there to see if something I need to buy is on sale) have become a little confused. Lotteries are not a financial service.

This week they are offering OLG: FREE Watch ‘N Win Lotto eCoupon, OK, I guess folks that play lotteries like freebies as much as the next person (note I have not made that an active link, you can go find it on the Red Flag Deals web site yourself (I am not in any way espousing you go buy lottery tickets)).

Cash Cows the Album
My Favorite Cash Cow

What worries me about this coupon, is where this coupon was came from.

Pardon me? When did a lottery become a Financial Service?!?!? Very bad form Red Flag Deals, create a new class like:

  • Stuff you are never going to get your money back from
  • Tax on the poor
  • Home -> Not a Deal -> Lottery

Any of those is better than Financial Services -> Other !

Wow! Lotteries are not a financial service, or a retirement plan! No matter what on-line coupon or deal companies think.

Rakuten Kobo Canada


Cash Advances and Lottery Tickets

Today I learned an interesting paradox that arises when you buy lottery tickets with a credit card. Luckily, I was not the lottery ticket purchaser. I saw on a local TV news program, where a gentleman was very upset to find out that if you buy a lottery ticket, or services from the OLG, the Credit Card company treats it as a cash advance. Remember Cash Advances start incurring interest charges the moment it is charged to your card.

I thought this was a great idea as a deterrent to buying lottery tickets. It might also deter using the OLG Gambling online program. The credit card companies’ logic is sound. Think of it, I buy lottery tickets with money that I borrowed, but will promise to pay it back? The Credit Card Company wants you to have the cash right away, but the only way to do that is via a cash advance.

Lottery Losses
Your Odds on the Lottery

To quote the OLG web site directly:

It’s important to note that your credit card issuer may apply a cash advance fee when using credit cards on PlayOLG. To be sure, check with your credit card issuer. 

Please note:  Not all credit card institutions accept online gambling transactions.  If yours is rejected, please try a card issued by a major Canadian bank or INTERAC Online.

Evidently, folks are not reading the suggestion to check with their Credit Card Companies as there are plenty of stories complaining about extra charges, and unnoticed cash advances.

Frankly, I agree with the Credit Card Companies (for once), but that is very mean-spirited of me.

One more helpful thing from the OLG site on their “Where does all the money go” page:

2% of forecasted OLG slot revenue to problem gambling funding



What is wrong in this story

This is a post from 8 years ago, but it still is interesting to me, hopefully for you gentle reader as well:

I keep finding things on Bruce Schneier’s security website that make me want to scream, but not necessarily just because of the Security Concerns. The post in specific (click here to read the whole thing) says:


Truly a One Armed Bandit

After a few hours of losses, he goes to the cashier and asks for a cash advance off of his credit card. The card tells the casino his name, but not much else. As is required by card issuers, the cashier asks for some other identification, such as a driver’s license. That license offers the casino a ton of CRM identification goodies, but the cashier is only supposed to glance at the picture and the name to verify identity and hand the license–and its info treasure trove–back to the gambler. Not any more, at least if a Minneapolis company called Cash Systems Inc. has anything to say about it.

The firm was recently awarded a U.S. patent for a device that can grab all of the data of almost any U.S. driver’s license in seconds and instantly dump it into a casino’s CRM system.

OK, so who in the name of Methuselah is making cash withdrawals from their Credit Card at a CASINO? If you are doing this, YOU HAVE A PROBLEM, and it is not just your DEBT REDUCTION plan is in the crapper.

If this is you, I beg of you see Gamblers Anonymous, or something like that, because your life is not your own any more. OK, I’ll get off my soapbox now. Be afraid of these kind of companies that want to get all the information they can about you. The more they know about you, the less privacy we all have.


A Guaranteed Lottery Pay Out

For those of you who watched the Million Dollar Neighbourhood on the OWN network, which starred our friend Preet Banerjee, you missed an interesting bit of media spectacle. The show itself was pretty straightforward, and while Preet seemed quite stern with some of the families, my opinion is that he held back a fair amount (he certainly is blunter in the conversations I have had with him (don’t get me wrong, I enjoy his honesty, and wished he was more straightforward on the show)).

Lottery Ticket from OLG
Not your Retirement Plan!

On the first show of the series, Preet had a great line that I am sure he wrote himself, which resonates with me very nicely. He talked with a couple where the husband is disabled and living on a fixed disability cheque, and the couple is having a hard time. In response to this hardship, the husband felt his only recourse was to buy lottery tickets (i.e. swinging for the financial fences).

Preet’s response was classic, and hopefully, I have captured it accurately here, “If I could give you a lottery that has a guaranteed payout of $2500 a year, would you take it?”. The husband responded that he would, and Preet’s response was classic:

“STOP BUYING LOTTERY TICKETS, and you’ll have $2500 a year.”

I have ranted about Lottery Tickets and Casinos as a means of retiring early before, hence why I like the comment. Even living in Ottawa, I am more likely to be bitten by a shark than win on the Lottery. However, remember The Shark Bite Story premise is what the Lotteries (aka the Government) is banking on you buying into, so you buy more lottery tickets.

Can’t I Make Money?

The Super Bowl is (I think I have heard) the most bet on an event in the world (which is a sad statement). Betting in general on sporting events is no better than Lottery Tickets (no matter how good a prognosticator you fancy yourself). As a basketball coach, I have learned, sh*t happens, and sometimes any team can win. That is why the game is played.

Oh, and the first person who says, at least the money from the lotteries goes back into the community gets a swift kick in the butt!


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