Mega Million Maniacs…Do lotteries have any economic benefit?


By: Dr. Lynn Reaser

NoLotteries involve essentially a transfer of income from one set of individuals to others (the winners) and the government.  The money that is spent on the lottery subtracts from funds that might have otherwise gone to other venues (including restaurants, movies, stores, and casinos) or even savings.  The winner might spend a significant share of the payout on “big ticket” items, including a car, house, or vacation.  There will thus be winners and losers in terms of both individuals and businesses, but no net gain.  Perhaps the only economic benefit is a brief euphoria and diversion for many Americans.  The downside is a sense that there is an economic “free lunch.”

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