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.


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 this on a local TV news program, where a gentleman was very upset to find out that this was actually the case (i.e. if you buy lottery tickets, or services from the OLG, the Credit Card company treats it as a cash advance).

I thought this was a great idea as a deterrent to buying lottery tickets (or using the new OLG Gambling on-line program), but the credit card companies logic is also very sound. Think of it, I buy lottery tickets with money that I borrowed, but will promise to pay it back? No, the Credit Card Company wants you to have the cash right away, and the only way to do that is via a cash advance.

Lottery Losses

Your Odds on the Lottery
Image courtesy of Stuart Miles at FreeDigitalPhotos.net

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 am thinking good on 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 straight forward, and while Preet seemed quite stern with some of the families, my opinion is that he held back a fair amount (he certainly is more blunt in the conversations I have had with him (don’t get me wrong, I enjoy his candor, and actually wished he was more blunt on the show)).

Lottery Ticket from OLG
Not your Retirement Plan!

On the very first show of the series Preet had a great line, that I am pretty sure he wrote himself, which resonates with me very nicely. He was talking with a couple, where the husband is disabled, and is 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 pay out of $2500 a year, would you take it?“. The husband responded that absolutely 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 I am to 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 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 that says, at least the money from the lotteries go back into the community, gets a swift kick in the butt!


The Shark Bite Story

Ever notice that there are things that sound outlandish that may never happen to you. Somehow you seem to know of someone, or know someone who it really did happen to? This is what the Lottery Commission  relies on to get you to buy their products.

Have you been hit by lightning? My guess would be you haven’t but you most likely know someone (or of someone) who has. Does that make you not go out in a lightning storm, or wear rubber soled shoes all the time? Not likely (if you do my apologies, I am using this simply as an example). Being hit by lightning in this instance is a relatively rare event. This depends on where you live and your habits during storms and such.

Here Sharky Sharky

Have you been bitten by a shark? Living in Ottawa, it isn’t likely for me to know anyone who has, but I do know of someone who was nipped by a tiger shark. That does make me nervous about swimming in the ocean. This simple incident causes an irrational fear of the ocean, in me. Why? I saw Jaws the movie and I know it is “possible”.

Do you know anyone who has “Won the Big One” with the lottery? You know someone directly or indirectly who won a considerable amount of money in a lottery. I worked with a group of folks who won the really big one (that was then spread between 18 folks). The number of lottery tickets sold would drop considerably if no one ever heard of anyone who won. That information doesn’t seem to stop Publishers Clearinghouse from bugging me. The Lottery Commission spends a considerable amount of money to advertise its winners. They rely on word of mouth advertising too.

The arithmetic (or odds) of you knowing of someone who won the big one is not as long as you think. I had a stats prof explain it to me, but I don’t remember the exact equation, so I’ll leave the specifics out of it, but it still does not increase your odds of winning with a single (or group) of tickets, all it does is give you an inflated view of your chances of winning.

Just because I won the lottery (as an example), the chances of you winning are no better (and no worse), remember the chances in a pick 7 lottery that the series 1,2,3,4,5,6,7 is the same as any other sequence of 7  (but if that ever showed up as the “lucky numbers” the winnings might be quite low, because of splitting it among thousands of ticket buyers).

Lottery tickets want you to act on your “hunches”, and buy their products, don’t be fooled, your chances are the same.


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