The Economics of Lottery


The lottery was first introduced in the mid-1980s in the District of Columbia and the United States. By the end of the decade, seventeen states and the District of Columbia had implemented lotteries. Another six states followed in the 1990s and early 2000s. North Carolina, Oklahoma, and South Carolina joined the fray. The lottery fever soon spread throughout the southern states, too. Today, there are several states with lotteries, including Florida, North Dakota, and Oklahoma.

Historical context

Although the US lottery generates over $60 billion in revenue each year, other countries have much larger lottery programs, and the revenue generated by these games is generally much higher. In the case of the US lottery, public approval of the lottery will likely be determined by the amount of money spent on public goods. In Australia, for example, lottery play has led to higher tax collections than any other source of revenue. While lottery play is still debated in many areas, there are several factors that determine the public’s level of approval.

Economics of lotteries

National lotteries generate significant revenue for states and local governments and have become a popular form of gambling for many Americans. While critics argue that these games encourage excessive spending, statistics show that they attract responsible participants who play responsibly and within their means. The average American spends approximately $220 a year on lottery tickets. Here are some facts about the Economics of Lotteries. Listed below are some of the main benefits and drawbacks of national lotteries.

Impact on state revenues

The lottery is raising money for many state programs. The funds generated by the games can be directed for specific programs and use to reduce appropriations from the general fund. These funds are subsequently returned to the general fund, where they may be used for whatever purpose the state deems appropriate. But critics of the lottery say there is little evidence that overall funding has increased. The popularity of the games may be partly responsible for the increase in discretionary funds.

Costs to players

According to the North American Association of State and Provincial Lotteries, about $80 billion is spent each year on lottery tickets, and the total amount of money wagered on electronic games is approximately the same. While most Americans do not play the lottery, the fact remains that every adult in the United States spends an average of $325 a year on lottery tickets. Players in low-income households tend to spend a larger portion of their income on tickets.

Addiction potential

While lottery gambling has been around for decades and is widely accepted as a socially acceptable form of gambling, there has been some recent attention to its pathological potential. In the present study, we sought to identify the criteria for pathological lottery gambling and examine the potential for pathological lottery gambling among regular players. We used a questionnaire designed to evaluate the diagnostic criteria of pathological gambling based on the DSM-IV. We identified 15.2% of the subjects as pathological lottery gamblers.