The lottery is a game of chance. We can also classify it as a type of gambling where winning is based on the drawing of lots or random numbers. They are prohibited or banned in many countries and also operate openly and legally in many.
In India, there are certain restrictions on the state-run lotteries and in some states, it is completely banned. However, Indian citizens can play international lotteries through online platforms like Lottoland.
Lottoland is the world leader when it comes to offering the online platforms for international lotteries both big names and not-so-big ones. In fact, sensing the huge market that India can provide, it is coming up with a new website in India.
Today, a lot of government-sponsored lotteries operate in a number of countries across the globe. With time, their popularity is only going northwards, and the internet has contributed a lot to it.
Evaluating Lotteries from an Economic Perspective
The economists evaluate the state-run lotteries from two perspectives: as a source of public revenue and a consumer commodity. It is no secret that the lottery generates a significant amount of public revenue. Though it’s a sheer game of chance, a large percentage of risk-averse consumers buy lottery tickets, which have always baffled the economists.
Analyzing lotteries from a consumer theory perspective, they are a consumer commodity. Acting to the nature of a true commodity, they are known for rapid growth and broader market penetration. A study suggests that 60% of the adult population indulge in it at least once a year. Among this percentage of the population, the most active 10% of players alone are responsible for 50% of the total amount wagered. The same amounts to 65% if we consider the top 20% of active players.
Let’s compare the sale of the lottery in countries where it is legal against other products that are sold directly by the state governments to the public. The comparison will show that the lottery sale comes only next to three major activities of government, which are education, public welfare and highways.
Lotteries are a good source of profit for the governments – those who win also pay huge sums as an implicit tax, which again goes to the government kitty.
As the popularity and growth of lotteries are on an increasing trend, it is but natural that many economic types of research have taken place on it. And these researches have pointed out several reasons that are responsible or are aiding its popularity.
The foremost reason for the governments to run it is that it has emerged as an important and growing source of revenue for them. The players, on the other hand, look at it as risking a small sum of money for getting a chance to win large prize money. Thus, if we keep aside the game-playing aspects, a person considers a lottery ticket as a risky financial asset, which offers huge returns for a very little investment. Even if they don’t win, then too, it provides them with an amusing pastime. They can discuss playing strategies with their colleagues or other like-minded people giving them a common topic to talk about.
After numerous studies on the subject, the economic theory is still unable to explain the consumer behavior related to it. The purchase of lottery tickets is only going up and is inconsistent with all the major factors that normally affect the sale of a particular commodity. These are risk aversion, rational decision-making and income or wealth maximization. The lottery players are increasing and so are the platforms that offer these games to people and the researches are still on.