Ramesh, you are right, of course. Competition amongst competing lotteries would increase the pay-out to wager ratio, or ought to. Nevertheless I don’t think that the ‘harm’ to the consumer here is very significant given the wider advantages that such lotteries bring. On the second issue, denying the government a revenue stream, I don’t think that you can compare a voluntary payment (buying the lottery ticket) with a compulsory levy (tax). Once we get on to real taxes, however, you make a good point, of course, about the dangers of ‘painless’ taxation. That said, a national sales tax might well have to be the price paid for a (low) flat income tax, but that’s a entirely different controversy…