Public Choice

, Volume 109, Issue 1–2, pp 101–117 | Cite as

The Leviathan Lottery? Testing the Revenue Maximization Objective of State Lotteries as Evidence for Leviathan

  • Thomas A. Garrett


Unlike other governmental units, statelottery agencies publicly acknowledge thattheir primary objective is revenuemaximization. This claim and the inherentmonopoly power of lottery agencies providesa unique arena to test for Leviathan. Withdata obtained from United States' lotterygames, I perform a Laffer curve analysis toderive the optimal lottery tax rates fordifferent categories of games. Theseoptimal tax rates and Monte Carlosimulations are then used to test whetherthe current tax structure of lottery gamesis indeed the revenue maximizing structure. I find strong empirical evidence for the``Leviathan Lottery''.


Empirical Evidence Primary Objective Curve Analysis Public Finance Revenue Maximization 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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Copyright information

© Kluwer Academic Publishers 2001

Authors and Affiliations

  • Thomas A. Garrett
    • 1
  1. 1.Department of Agricultural EconomicsKansas State UniversityManhattanU.S.A

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