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The Lottery As a Public Good

If the entertainment value (or other non-monetary value) of winning a lottery prize is sufficiently high, then the disutility of a monetary loss can be outweighed by the combined expected utility of monetary and non-monetary gain. Therefore, it is not unreasonable for individuals to purchase a ticket in order to increase their chances of winning.

Lottery games are designed to maximize the number of tickets sold, thereby generating revenues and allowing for a large prize. To this end, state governments often introduce new games in an attempt to maintain or increase revenues. The most common example of this is the introduction of scratch-off tickets.

In a political context where many voters and politicians seek painless tax revenue, lottery is an attractive option for raising funds. Indeed, many state governments depend on this source of revenue to the point where they run a risk of not being able to continue funding essential services in the event that the lottery is not successful.

Despite the reliance on these painless revenues, critics argue that a lottery’s ability to promote addictive gambling behavior, its alleged regressive impact on lower-income groups and other problems are not fully offset by the benefits it brings to society. Nevertheless, as the lottery continues to evolve and expand, policy makers need to consider whether this is an appropriate function for government at any level.