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I just read an AP article which says "State Lotteries Face Squeeze." One of the pieces of evidence for this is, "Overall ticket sales grew by only 0.4 percent last year." Hm, sales are still increasing, but not as fast as they were, so they are in a "slump." That makes little sense. They may actually be losing money, even though sales are increasing. But, the article does not say that they are losing money. Several states are experiencing fewer sales. So, some states are indeed in a slump. In Texas, we find that fewer sales may be due to that state's reducing the lottery's payout, in order to increase their profits. Does that mean that Texans who were buying lottery tickets realize that they were being cheated? They are smarter than Texas thought they were.
State Lotteries are a big time sucker bet. If you flip coins against your friends, what is your expected return on $1? The answer is $1. You should win $1 for every $1 you spend (you should come out even). If you go to Vegas and play craps, what is your expected return on $1? The answer is about $0.95 (as far as I remember), assuming you make no stupid bets. You should lose a nickle, for every $1 you risk. How about the lottery. You should win $0.50 to $0.60 for every $1 you spend. In gambling terminology, this is called a sucker bet. Slot machines in Vegas are better than this. Keno in Vegas is better than this. And slot machines and keno are the poorest bets in Vegas.