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Lotteries can be detrimental to a subset of society since people who often play dont understand stats and that for most part lottery is negative expected value. However, taxes (and portion of ticket sales) are used for funding local projects which can be beneficial to community. Are there any alternative ways to raise this funding besides taxes or taking advantage of people who play the lottery?

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    $\begingroup$ Note that it is not irrational to buy lotteries with a negative expected value! If an individual is risk-loving, this is completely rational. Thus, if the government sells lotteries to risk-loving individuals to fund public goods, this raises welfare in society. $\endgroup$ – HRSE Nov 13 '15 at 2:26
  • $\begingroup$ Relevant to the point made by @HRSE - economics.stackexchange.com/questions/4998/… $\endgroup$ – Jamzy Nov 13 '15 at 3:31
  • $\begingroup$ I would say sport betting. It depends on the company, but nearly 95% of the players realise negative profit on the long run. $\endgroup$ – Übel Yildmar Jan 13 '16 at 15:15
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Municipal bonds are a method of local funding. The bonds could be funded through borrowing money or tolls. The bonds will probably yield better returns than the lottery for money givers. This means that municipal bonds could be an effective way of generating revenue in a short period of time. On the other hand, one key difference between bonds and the lottery is that at some point, additional funding is needed for bonds, whether through tolls or borrowing.

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