South Dakotans are generally known to be tax-averse, but the Powerball lotto game has revealed a surefire way to get them to fund the government.
Just give them an infinitesimal chance to win an enormous cash prize, and they’ll fork over money — what could be considered a voluntary tax — to state government in droves.
The record $800 million estimated Powerball jackpot for Saturday night’s national drawing is driving a frenzied rush for tickets in the state. As of Friday afternoon, about $4.22 million worth of tickets had been purchased by South Dakotans since the last time a Powerball jackpot was won Nov. 4, and that amount was expected to grow rapidly through Friday night and today.
The surging ticket sales are exactly what Powerball officials wanted last fall when they made the odds of winning longer, thereby ensuring larger jackpots.
Regardless of whether anyone wins Saturday's big prize, the game has already been a bonanza for state government. Thirty-two cents of every dollar spent on Powerball stays with the state, which means the state’s haul in just the past couple of months has been about $1.35 million. While some of that money funds routine government functions, some of it is spent on little-known items including ethanol subsidies.
The odds of winning the Powerball jackpot are about 1 in 292 million, which a local math expert described Friday as roughly equal to the odds of randomly selecting a specific grain of sand on Daytona Beach.
“According to the National Weather Service, the odds of being struck by lightning in a year are 1 in 960,000,” said Kyle Caudle, an assistant professor in the Department of Mathematics and Computer Science at the South Dakota School of Mines & Technology. “With those odds, I don’t plan on getting struck by lightning next year, and since it is 300 times less likely to win the Powerball, I don’t think I’ll play Powerball, either.”
Among the people interviewed for this story Friday, he was the only one who swore off a ticket purchase. Everyone else, from everyday folks to state bureaucrats, acknowledged that they or their spouse had purchased, would purchase or would consider purchasing at least one $2 ticket prior to the 8:59 p.m. Saturday drawing.
Ronald Flemming, a counselor for Lutheran Social Services in Rapid City, said the rush is reflective of a common dream.
“Everybody wants to win; everybody wants to have that ideal life, that utopia,” Flemming said. “That’s the hope.”
That hope is fueled by memories of the three previous Powerball jackpot winners from South Dakota: Neil Wanless, of Mission, who won $232 million in 2009; Bill and Tina Nguyen, of Pierre, who won $116.8 million in 2006; and a group of 34 people from Watertown who shared $50.9 million in 2003.
While ticket buyers dream of a mansion or new car or other ways to spend potential winnings, they probably do not pause to consider the money they are willingly donating to state government.
In fiscal year 2015, the state got more than $4.3 million in net revenue from nearly $13.5 million in Powerball ticket sales.
And that’s just from Powerball. When the other lotto games available in South Dakota are figured in — Mega Millions, Wild Card 2, Hot Lotto and Dakota Cash — the total revenue retained by state government from all five in fiscal year 2015 was nearly $7.6 million, drawn from total ticket sales of more than $25.3 million.
Where the money goes, according to Jim Terwilliger, state economist with the Bureau of Finance and Management, is “kind of a big web.”
The revenue from the five lotto games is lumped together, and the first $1.4 million from that sum is peeled off for state government’s general fund to help pay for all manner of routine government functions.
The rest of the revenue — which amounted to $6.18 million in fiscal year 2015 — is split among three state funds: the water and environment fund, which gets a 71.8 percent share; the ethanol fuel fund, which gets 25.6 percent; and the state highway fund, which gets 2.6 percent.
In dollar amounts, the fiscal year 2015 split was about $4.44 million for the water and environment fund, $1.58 million for the ethanol fuel fund and $161,000 for the highway fund.
The highway fund pays for roads, bridges and other transportation-related items. Much of the water and environment fund money goes to cities, rural water districts and other local entities in the form of grants and loans for water-related projects, including upgrades to wastewater treatment plants, replacement of water and sewer lines, and construction of new water towers.
The ethanol fuel fund pays a 20-cents-per-gallon production subsidy to ethanol plants that were operating by the end of 2006. A qualifying plant can receive up to $1 million per year and up to $10 million total over multiple years. The fund was established in the 1990s to encourage production of ethanol, a biofuel made primarily from corn that is mixed with gasoline.
Ticket buyers were funding all of those recipients of lotto revenue as they patronized the state’s 608 lottery retailers Friday.
At Big D Oil on Jackson Boulevard in Rapid City, 127 Powerball tickets had been sold by 2 p.m.
At the Johnson Siding General Store west of Rapid City, customers were commenting on the winning $6.7 million Hot Lotto ticket that the store sold in December as they bought their Powerball tickets.
What were they saying?
“Basically that we’re the lucky place to go now,” said clerk Amanda Sulzbach.
At the Thrifty Smoke Shop on East North Street in Rapid City, an employee who asked to remain anonymous said he bought a ticket just like seemingly everyone else who entered the store Friday.
“At least for a day,” the employee said, “you can dream about having a bunch of money.”