Dragomere wrote:Arkolon wrote:Your post didn't make sense but I'll still try.
profit = operating income - operating expenses. Therefore, a tax on profit does not prevent lotteries from paying their employees, manufacturing tickets, or paying their bills, since those things are included in OPEX (operating expenses).
Lotteries usually work if the promised amount of money in the cash prizes is lower than, you know, the cost of production and the money you actually have. I think that's obvious. Lotteries work in such a way that, if it costs $0.25 to make a ticket and you sell ten million of them or whatever at $2, you can offer a maximum of (2 - .25) * 10m = $17,500,000 in cash prizes. This bill is mandating that the minimum that can be offered in total cash prizes is 60% of that, so in that case $10,500,000. Knowing that in the first case profit = 0, the second case has a profit = $7,000,000. That's 280% of OPEX, at a minimum. That's not a threat to any lottery's viability.
The great thing about percentages is that, so long as the tax is far enough from 1, you can tax twice, three times, four times, sometimes five times and your taxed income/profit won't disappear. $7,000,000 * 0.7 = $4,900,000, or nearly twice as much as OPEX. $7,000,000 * 0.75 = $1,176,490. Still a profit. Still for-profit. Still a viable lottery, even if it was taxed five times.
I don't know what this means.
"a. A minimum of 60% of total cash amount paid by players must be won by the players (can also include good/service prizes with a fair and reasonable cash amount)
b. For-profit lotteries will be required to pay 30% of their profits to the Dagmari Lotteries Foundation, with 10% of the returns to be set side for a special fund to help reduce problem gambling (the remainder 20% will be dealt in Section 5c). This amount can be greater, if specified in the licensing agreement."
Reading this in terms of For-Profit Lotteries, 60% of the profit goes to the winnings, 30% goes to the DLF, and 10% goes to funds dedicated to eliminate gambling. There are only two ways to interpret this:
1. There is no profit in lotteries that are supposed to be done For-Profit.
2. (assuming the 10% is a part of the 30%) only 10% of the money gained from the lottery pays for the lottery.
Either way, sections 4a and 4b destroy the functionality and ability of For-Profit Lotteries.
Payout is an operating expense, and 30% of 30% isn't 0%, it's 9%.
income - (0.6 + x)income = profit
0.3profit = money that goes to the DLF
profit - 0.3profit = 0.7profit <-- profit the lottery keeps, 70% of its gross profits
where x is the cost of production divided by income
