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I Have a Dream…about Implicit Taxation of a Government-Run Gambling Monopoly

2 min readBy: Alicia Hansen

We’re used to thinking of lotteries as examples of poor state tax policy, but we might soon be talking about the tax policy problems of federal lotteries as well: All state lottery agencies have been asked to submit suggestions for a national game to the National Lottery Joint Development Group.

Margaret DeFrancisco, president and CEO of the Georgia Lottery Corp., is an avid proponent of a national lottery and discusses the idea with the sort of rousing language that one would not normally associate with lotteries. From La Fleur’s Magazine (PDF-see page 31):

“Dream with me about a national lottery that is part of the cultural fabric of America,” concluded DeFrancisco. “But let us not just dream it; let’s make it happen.”

DeFrancisco, looking for tips, went to GLC’s ad agency, BBDO Atlanta, to come up with an outline on how to conduct such a mammoth task. The ad agency responded by offering to stage a “BBDO workout”—a large scale brain storming process comprised of “professional dreamers.” …

… Each person was told to ignore technological and governmental limits because these ideas were suppose [sic] to be “high ideas” to work from… .

The “dreamers” came up with some games that might present taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. challenges beyond the usual tax policy problems of government-run lotteries. Some of the community-based games could raise questions about income taxation of lottery winnings. Here are a few of the suggestions:

Group Play revolved around the concepts of “only if we win, can I win.” The concept for the “Living Ticket” fits into this type of thinking by making players buy tickets with numbers and colors. When the national lottery releases the entire code, individual players must find each other to complete the full sequence of numbers and colors. This game would be great for social networking applications or reality TV.

Another fun game, called Facebucks, uses social networks to facilitate community involvement in lottery games. If you play the game and win, every Facebook friend shares in the winnings.

The last concept is “From Me to We” which stresses that instead of one player winning, the player and his surrounding community wins. The Great American Block Party revolves around the concept that if you win, your community wins.

The Bring ’em Along game permits you to designate five friends or charities that would win $50,000 each if you won $1 million.

More on government-run lotteries.

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