The Leviathan Lottery? Testing the revenue maximization objective of statelotteries as evidence for Leviathan

Unlike other governmental units, state lottery agencies publicly acknowledg e that their primary objective is revenue maximization. This claim and the inherent monopoly power of lottery agencies provides a unique arena to test for Leviathan. With data obtained from United States' lottery games, I per form a Laffer curve analysis to derive the optimal lottery tax rates for di fferent categories of games. These optimal tax rates and Monte Carlo simula tions are then used to test whether the current tax structure of lottery ga mes is indeed the revenue maximizing structure. I find strong empirical evi dence for the "Leviathan Lottery''.