RE: Business Imperatives & the Lotto

One of the economic discoveries made in states with lotteries is that there is an inelasticity of demand in the convenience store business. While the lottery tickets represent a draw for walk-in traffic to the stores, the dollars spent once inside are not altered by the presence of the lottery. The only way for lottery operators (the state governments) to keep lottery vendors (the stores) from bailing out, is to make the stores' profit margin close enough to that of milk, cigarettes, candy, pop, and beer to offset the loss of profit from those items. Of course, this means that lottery money, which would have been spent on milk, cigarettes, candy, pop, and beer and therefore on the economy as a whole, has disappeared into the public sector, never to be seen again.