The states skim 50% off the top of lottery sales, then operating costs of the lottery commissions are deducted, and finally about 30% of the revenue is paid back as prizes. The Mob used to pay out a higher percentage on the numbers racket. The lottery really is a voluntary tax on people who don’t grasp probability. On the plus side, the convenience stores are filled with retirees buying scratch-offs from the machines, so in a way they are rolling their social security back into the system.
The states skim 50% off the top of lottery sales, then operating costs of the lottery commissions are deducted, and finally about 30% of the revenue is paid back as prizes. The Mob used to pay out a higher percentage on the numbers racket. The lottery really is a voluntary tax on people who don’t grasp probability. On the plus side, the convenience stores are filled with retirees buying scratch-offs from the machines, so in a way they are rolling their social security back into the system.