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State lotteries currently operate in 43 states across the US. Recently, three states have privatized their lottery operations, handing over the management of their lotteries to private companies in hopes of generating greater revenues for the state governments. Questions arise regarding the economic rationale for this decision and an economic model is presented to determine whether one state, Illinois, has been successful at generating more state transfer revenues as a result of privatization in its first year of results. The issue of lottery privatization is also examined

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