Lotteries are a tax on the stupid, and they tend to be sharply regressive; poor people buy the bulk of lottery tickets. Donald Sensing mentions a lottery scam email he received and then correctly notes that all lotteries are scams.
The California lottery has a rate of return of around 12%. Slot machines in Vegas generally return 98%+ of the money you put into them, and they've got flashing lights and spinning wheels. As you can imagine, state governments make a killing off lotteries... but the money goes towards education, right?
The California lottery raked in $2,910,000,000 in 2002... that's around $100 per California resident -- including children. With a payout of 12%, the education system should have gotten around $2.5 billion from the lottery, right? Well, actually, the law says that only 34% of lottery revenue has to go towards education, and in 2002 that came to around $1.1 billion.
34% to education, 12% to lottery winners, and the rest goes into the irresistable black hole of California's bureacracy. Oh well. At least it's a voluntary tax.