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Journal of Consumer Policy

, Volume 41, Issue 3, pp 257–272 | Cite as

The Political Economy of State-Owned Lotteries

  • Alexander Fink
Review Article

Abstract

An incomplete contracts approach is applied to analyse the lottery industry. It is argued that lottery services are more efficiently provided by private enterprises than by public enterprises, even if the addictive potential of lotteries is taken into account and government is assumed to be benevolent. However, in most countries, state-owned enterprises provide lottery services. In Germany, the 16 states each own a monopoly lottery-providing enterprise. This apparent puzzle is resolved by dropping the assumption that members of government are perfectly benevolent. The narrow self-interest of members of the state governments and other influential stakeholders in Germany helps to explain the persistence of the current structure of the lottery industry.

Keywords

Lotteries Lottery regulation Private versus state ownership State-owned enterprises Lotteries in Germany 

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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Department of EconomicsInstitut für Wirtschaftspolitik, University of LeipzigLeipzigGermany
  2. 2.Institute for Research in Economic and Fiscal IssuesParisFrance

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