Economics of the Lottery

How lotteries help us all
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Economics of the Lottery
  • Author:
    William Monroe
  • Published:

Many people feel that gambling in general, and lotteriesin particular, are simply sources of income for the government, along the same lines as property taxes and speeding tickets.

Economic Reality

However, in reality, all gaming activity, including lotteries, are not used as simple income generating schemes, but as fundraising activities, as the majority of the money made goes towards charities, agencies, and government entities that provide a variety of services directly and indirectly to the community.

For instance, homeless shelters, food banks, soup kitchens, housing, employment, health, schools, and other similar groups receive lottery income to support and maintain their services to clients and the public.

Government agencies and departments such as welfare, social assistance, community health, child and family services, and so on, may receive lottery funding to enable them to continue to help those dependent on the system.

Part of lottery proceeds also go towards responsible gaming initiatives such as advertising, research, prevention, and treatment of problem gambling, which can be a result of the advertising and marketing of gaming activities.

Creating Jobs

Direct jobs created by lottery operations include clerical, technical, management, security, surveillance, operations, and others.

Indirect jobs created are suppliers (equipment, delivery, research and development, sales, marketing, etc.), retailers (seller of lottery products,) marketing and advertising firms, legal and accounting firms, television, radio, and print publications who run lottery advertising.

The direct influx of lottery profits not only directly goes to those within the gaming industry but to those who are affiliated with the gaming industry. This influx translates into jobs and jobs translate into spending which goes into the economy.

The clients helped with lottery profits also either receive funding, or products and services, that allow them to keep and spend more of their own money, or provide funds for them to spend directly.

It can also get people off social assistance and other types of support, which alleviates the drain of money and resources within a community. This also helps the economy.

Everyone's a Winner

Lottery winnings, especially large wins and huge jackpots, provide a plethora of advantages to the economy as well.

For instance, a direct result of someone winning a multimillion-dollar jackpot is that they may be relieved of financial pressure.

Unable to keep up with rent or mortgage, groceries, utilities, and other bills, winners can now afford to pay off debts and become financially independent.

Debt repayment, catching up on bills, and being able to buy better food, clothing, and housing, brings money into the local and regional communities and economies.

With more people able to spend more money, and more money being saved by the reduction of support, local businesses see an increase in profits coming in.

Local charities and local and government support agencies see a reduction in the number of clients and therefore a savings on the cost of services. State/provincial and federal agencies also see a reduction in client support and money expenditure.

And winners spend more money locally, country-wide, and internationally, adding money to those economies as well.

So just because a person wins two million dollars does not mean it is going to sit in the bank forever.

Financial burdens will be eased and spending will occur, saving on the money used for assistance, and brining money into the economy.

So even though you might not win the jackpot today, those who do, and when you do, hopefully, in the future, remember that the winner is not the only one who profits from their good luck.

Many other people, and the economy as a whole, will profit as well.

Yes the economy is a big circle of money and we all contribute to and benefit from it.

But the more money and jobs lotteries contribute to the circle, and the more money saved in community services, the better off the economy gets and the better lives we all can live.

Lotteries are a backbone of economy sustainability and whether you win a couple of dollars to buy some bread, or a few hundred thousand or millions of dollars to pay off your mortgage or buy a new house, remember that lotteries benefit more than just the operator or the winner.

Lotteries ultimately benefit us all.

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