We look at how lottery proceeds support the economy
Lotteries bring in a lot of money and that money gets disbursed to many stakeholders including the government and the lottery operator. Although the lottery is a great entertainment pastime, it also helps out with funding charities. But even with that, do the proceeds of the lottery that are disbursed around really, honestly support the economy in any way?
Lotteries do help the economy
The answer is a very huge YES! With all the money that’s taken in from lottery sales, much of it is used to pay off expenses related to running the lottery and the draws. Salaries and wages for the staff and management have to be paid. Equipment used to ensure the security and safety of all the lottery equipment needs to be maintained and upgraded. Costs for advertising and marketing to reach out to current and new players need to be paid to keep the money coming in. Of course utility costs and the money used to pay out the prizes take a good chunk out of lottery income.
All this money that goes out into the world to run the lottery and pay the prizes actually does support the economy in many ways. Suppliers who provide lottery signage, equipment, paper, terminals, balls, blowers, and scratch tickets all need to get paid for their products and services. This in turn enables the suppliers to pay their own employees who spend their money on rent, mortgage, food, entertainment, and lots of other things needed for daily living, which as them injecting their money into their local businesses. Suppliers have to pay their own suppliers for raw materials to produce their products they make for the lottery operator. And of course those suppliers have to pay their employees, which then again filters down into the economy in both personal and business spending.
Where lottery income goes
A large portion of the lottery income is distributed among numerous charities that help those clients who are in vulnerable or low economic situations to be able to live their lives by being able to get services and products to be able to survive. These persons use any money or assistance they get to obtain basic necessities. The money the charities receive is used to buy what they need to help their clients, or support fundraising or the donation of food, clothes, other items, and services such as medical and employment.
A majority of lottery income is put back into the actual draw pools to replenish money that is won and paid out to players. All money that is won, even a one dollar win, whether it goes back to the operator on another ticket purchase, used for everyday or extravagant purchases, or placed into various investments, eventually ends up in the economy where various businesses use it to get their products and supplies, which helps out the manufacturers, which supports the economy.
The receipt and spending of lottery money in many different ways enables people in local and regional communities to live and thrive day to day, support businesses that provide products and services within the communities so that these businesses are successful and make their own profits that will eventually end up in the economy.
As we can see, lotteries are not just a gaming option for people to dream about winning millions of dollars. They are a very important business and industry that directly and indirectly drives the economy like every other business does. So buying your ticket isn’t just a way of gambling and hoping you win a big prize. Your ticket also helps your community in many ways by being part of the big circle of our ever-moving economy.