Photo Credit: ABCnew.com

Californians joined in the country’s fever over an extraordinary Powerball prize, leading the nation in ticket sales — but not without raising conflicting feelings about the lottery.

“In California, about 80 cents of every $2 ticket sold goes toward education,” as the Los Angeles Times reported. “Nationwide, more than $1 billion in Powerball tickets were sold, lottery officials said.”

Playing with fire

But the mind-boggling sum at stake has brought California’s long debate over the virtues and vices of state lotteries back into the spotlight. “Addiction experts are concerned the rising Powerball jackpot could bring those dealing with gambling addictions back into their old habits,” according to CBS Sacramento. “The odds of winning Wednesday’s $1.5 billion drawing [were] 1-in-292 million, but the odds of having a gambling addiction in California are 1-in-25.”

The controversy has extended to the popular practice of office pool purchases in the workplace. “Previous groups of lotto winners have seen their feelings of victory evolve into anger and disputes that ended up in court for years when one buyer claimed there was never a pool, or someone who didn’t pitch in money feels they should still have been included,” as NBC Los Angeles cautioned.

Nationwide, meanwhile, the debate has roped in religious figures as well, with some pastors beginning to publicly question the wisdom of the system, as the Christian Post recently noted.

For years, critics have pointed to analyses that suggest poor lottery players are impacted negatively and disproportionately by the allure of massive paydays. “While approximately half of Americans buy at least one lottery ticket at some point, the vast majority of tickets are purchased by about 20 percent of the population. These high-frequency players tend to be poor and uneducated, which is why critics refer to lotteries as a regressive tax,” as Wired reported in 2011. “In a 2006 survey, 30 percent of people without a high school degree said that playing the lottery was a wealth-building strategy,” the magazine observed. “On average, households that make less than $12,400 a year spend 5 percent of their income on lotteries — a source of hope for just a few bucks a throw.”

The cost of winning

Even those who beat the odds have sometimes found themselves more cursed than blessed by riches. “The sad truth of lottery winners is that their lives don’t always end up as idyllic as they might imagine, many of them becoming not only the target of a massive tax burden and low-level scam artists, but also a magnet for their own vices,” as Jared Keller wrote at Pacific Standard.

“Suzanne Mullins won the Virginia lottery in 1993 and ended up paying out a $154 million settlement to a loan company after going deeply into debt; Evelyn Adams gambled away $5.4 million in Atlantic City; Willie Hurt blew $3.1 million on a crack addiction. Even Pentecostal preacher Billy Bob Harrell Jr.’s generosity after winning a $31 million jackpot in 1997 became his undoing — he simply couldn’t say no when people asked for a handout, and ended up killing himself after his money (and wife) ran out.”

Assuming a Californian winner preserved his or her fortunes in other ways, both good and bad news remain on the tax front. “In this 44-state contest it may be advantageous to win in California, which is one of 10 states where the lottery winner will not be required to pay state taxes,” the Orange County Register surmised. “Still, the federal tax bite is fairly big, leaving a lump-sum winner with $524 million.”

Impacting schools

Despite the commotion and concern, California education advocates have insisted that Powerball was making even more of a positive impact than usual. “Last year, on average, Powerball pulled in about $7 million in gross revenue in California each week, which means a not-so-whopping 42 cents or so was allocated to each of the state’s 6.2 million students,” as the San Francisco Chronicle reported. “Last week, though, as the jackpot climbed into the stratosphere, people dreamed of buying jets and yachts and sports franchises. The state sold $267.5 million in Powerball tickets, or about $16 per kid.”

Now, the nonprofit arms of these billion-dollar businesses are looking to gain a special exemption from the state’s rules on charitable fundraising.

A proposal speeding through the legislature would grant nonprofit organizations affiliated with professional sports franchises a special exemption from the state’s laws on charitable raffles.

Senate Bill 549, authored by state Sen. Isadore Hall, D-South Bay, would exempt nonprofits affiliated with sports franchises from Proposition 17, a 2000 ballot measure that allowed private nonprofit groups to conduct raffles. That voter-approved initiative requires 90 percent of a raffle’s proceeds to be spent on charitable purposes.

SB594 would allow sports-affiliated nonprofits to run a 50-50 raffle, where half of the proceeds can go to a gambler. According to the bill’s text, the only eligible organizations are those connected to “a team from the Major League Baseball, National Hockey League, National Basketball Association, National Football League, Women’s National Basketball Association, or Major League Soccer, or a private, nonprofit organization established by the Professional Golfers’ Association of America, Ladies Professional Golf Association, or National Association for Stock Car Auto Racing.”

Sports charity donates to California Legislative Black Caucus

Proponents of the special perk for sports franchises say that it encourages more philanthropic giving.

“Results of 50-50 charitable raffles in over 29 states have been tremendous,” Senator Hall, the bill’s author, recently testified before the Assembly Governmental Organization Committee. “This measure will supplement great charitable work done by professional sports franchises throughout the state.”

That charitable work includes a nonprofit organization managed by state lawmakers.

According to its most recent tax return, the Los Angeles Dodgers Foundation has contributed $15,000 to the California Legislative Black Caucus. The current vice-chair of the Black Caucus is none other than Senator Isadore Hall, III — the author of SB 549.

Last session, Asm. Reginald Byron Jones-Sawyer Sr., the chair of the California Legislative Black Caucus, authored a nearly identical bill, AB 1691. Jones-Sawyer’s bill faced strong opposition from the state’s tribal groups, which saw it as encroaching on their turf.

“When you go from a 90-10 split to a 50-50 split, you’re moving away from charity to something more like a lottery,” David Quintana, a lobbyist for the California Tribal Business Alliance told the Los Angeles Times last year. “This is a huge change.”

Questionable spending by sports charities

In addition to benefiting nonprofits managed by state lawmakers, CalWatchdog.com’s review of California-based sports franchises found that their charitable entities frequently spend money on questionable activities that often benefit the underlying pro sports business.

According to the group’s tax return, the San Diego Chargers Charities spent nearly $40,000 to run its “Junior Charger Girls” program. The group’s noble charitable function: to teach girls aged seven to fifteen “the performance routine from the official Charger Girls Dance Team.” The nonprofit also spent $5,891 on football tickets.

In some cases, the sports nonprofits lose money on lavish fundraising events. The Los Angeles Lakers Youth Foundation spent $100,000 to a rent a golf course for a fundraiser that lost money, according to the nonprofit’s most recent tax return.

The Oakland Athletics Community Fund spent thousands of dollars on promotional-type events and fundraisers, including $65,525 for a golf tournament, $53,611 for a “bowling bash” and $9,654 for player appearances, according to the organization’s most recent tax return. That doesn’t include the $98,774 spent on “grants” to the Athletics Investment Group, LLC, the company that owns and operates the Oakland Athletics. The grants were for tickets to A’s home games, yet the organization did not acknowledge a relationship between the two entities in its tax filings.

Senate Bill 549: Sweetheart deal for sports nonprofits

A statewide coalition of charitable organizations says the legislation provides a special perk to a small group of nonprofits.

“SB 549 lets professional sports teams and their foundations play by different rules than the rest of us,” CalNonprofits, a statewide advocacy group that represents more than 10,000 nonprofit organizations, wrote in opposition to the bill. “All other nonprofits – school bands, symphonies, humane societies, rotary clubs and food banks, and all the rest of us – would be limited to the current 90/10 rules, whether they prefer it or not. And that’s not fair.”

Because the bill amends a voter-approved initiative, it requires a two-thirds vote of both houses — giving Republican lawmakers rare power to influence public policy. The Republican Caucus’ analysis of the bill has raised concerns about the bill, especially its proposal to add a new $5,000 fee.

“There is a fee contained within this bill,” a Republican staff analysis of the bill warns lawmakers. “The bill requires eligible sports franchises, manufacturers and/or distributors of raffle related products and/or services to pay a $5,000 annual fee, in addition to a $100 fee for every individual raffle conducted at an eligible location to the DOJ in order to cover the administrative and enforcement provisions of the bill.”

Not a single lawmaker — Republican or Democrat — has voted against the bill.

The San Diego native has made news for years with his gambling, showing his contempt for societal norms attempting to dictate to adults how they should enjoy themselves.

In January 2013, Mickelson made the Drudge Report (and Cal Watchdog)  for grousing about how high his income taxes had become because of the passage of Proposition 30 and federal deduction changes. Here’s Richard Rider’s sharp take on the flap.

Now it’s onto another area in which Lefty acts out in libertarian fashion: taking on (very indirectly) America’s weird and broad rules about insider trading.

So legendary investor Carl Icahn and pro golf superstar Mickelson have a casual golf buddy in common: Las Vegas gambling-biz figure William “Billy” Walters.

Icahn and Mickelson, however, don’t know each other.

Yet when Walters shares an Icahn tip with Mickelson, once again there are Drudge headlines about Mickelson, this time suggesting he is guilty of insider trading.

If that constitutes a crime, that’s insane. Some of the coverage hints that this is only the tip of the iceberg. But if this is all the FBI and SEC have, oh, my.

So let’s headline the obvious question:

What’s next for Phil, Stealth Libertarian Crusader?

Will he go speeding and then be bludgeoned for demanding that he be allowed to tape the interrogation after the CHP pulls him over?

Will he go rad and complain that the great majority of stop signs should be yield signs?

Or will Mickelson go micro and foment local civil unrest over the preposterous fact that the manager of the Rancho Santa Fe homeowners assocation makes at least $275,000 a year?

We’ll see. It’s an exciting time to be a Phil fan.

The tiny Manzanita Band of Mission Indians proposes to build a ginormous “casino facility” on a 61-acre parcel of land.

The tribe’s tricked-out casino will boast 2,000 slot machines and 45 gaming tables. It also will have a 200-room hotel, a banquet/meeting hall, three guest restaurants, a swimming pool and a 6,000-space parking structure.

There’s just one small problem: The Manzanitas’ reservation is in southeastern San Diego County, near the town of Boulevard. They propose to build their gambling hall 50 miles east of their reservation, in the Imperial County town of Calexico.

There’s would be the first off-reservation casino in Southern California.

Imperial County officials recently approved the proposed Manzanita casino, desperate for the $112 million a year in commerce and 2,400 full-time jobs the tribe promises.

They expect to receive long-awaited approval this year from the U.S. Bureau of Indian Affairs. Then it will be left to Gov. Jerry Brown for his consideration.

I have previously supported Indian gaming.

Partly in recognition of the way Native Americans have been treated in this nation and this state. And partly because I thought it a preferable, albeit imperfect, alternative to tribal reliance on government welfare.

But I draw the line at off-reservation gaming — like 72 percent of Californians, according to the Sacramento polling firm J. Moore Methods.

If tribes are free to build casinos anywhere and everywhere they choose, it will accelerate the proliferation of gaming throughout the state. California will transmogrify from the Golden State into the Gambling State.

As it is, California already is one the nation’s biggest gambling states. We’ve got nearly 60 tribal casinos. We’ve got more than 90 non-tribal card clubs. We’ve got horse racing. We’ve got off-track satellite wagering. And, of course, we’ve got the California Lottery.

Cash Cow

Time was when the gambling industry had “dis-favored” status in the eyes of the state government (kind of like the tobacco industry today). That was because of the problems that go along with gambling, not the least of which is heightened criminal activity.

But then the state government itself developed an addiction to gambling. So, while state officials may consider it less than desirable that hundreds of thousands of residents are regularly depositing their hard-earned money at blackjack tables, betting the ponies or buying SuperLotto tickets, they can’t get enough of  the tax revenue the state’s more than $13 billion-a-year gambling industry generates.

Yes, the lottery helps to pay for schools. And tribal casinos — such as the off-reservation facility the Manzanita Band proposes — create jobs and stimulate local economies.

But as Aldous Huxley, author of “Brave New World,” famously stated, “We know the pursuit of good ends does not justify the employment of bad means.”

– Joseph Perkins