Whether they admit it or not, lottery players are staking a lot of money on an extremely long shot. The exercise can be trippy because we know we’re not going to win, but we keep playing. Besides, it’s fun. And it’s a great way to make a few bucks.
State governments run the official lotteries with a range of policies and goals. One is to raise money for a variety of public projects, including schools. But the big issue is that these lotteries are promoting gambling, and they’re a lot like casinos, sports books, and financial markets in that respect. States should consider if they really want to be in the business of encouraging addiction by offering these games.
While there are some who say that state lotteries are a good idea because they raise a significant amount of revenue for states, it’s important to look at what percentage of total state revenue these games actually represent. In the last five decades, they’ve raised about $502 billion. That sounds impressive, but in actual terms it represents a tiny fraction of state budgets.
In addition to the prize money, a certain percentage of the total pool must be deducted for costs of organizing and promoting the lottery. This can include advertising, ticket sales, and administrative expenses. Ultimately, the winner receives the remainder of the prize pool after paying any taxes or offsets.