Last week a lucky Lotto player won $27 million. All the attention the game has been receiving recently makes this a good time to ask why it is still run by the state?

Lotto sales totalled $925.9 million in 2010–11, spurred by a number of large jackpot draws, of which $183.3 million (20 per cent) was paid to the Lottery Grants Board for distribution in the community. Lotto estimates that 2.58 million of us played at least once in 2010–11 (although preliminary figures from the latest New Zealand Health Survey (NZHS) suggest the number might be closer to 1.8 million).

Regardless of which estimate is more accurate, the player numbers and sales figures show that the Lotto stable of products (including Powerball, Keno, Big Wednesday, and Strike!) appeal to consumers. So why not treat these products like any other consumer goods?

There seems little good reason not to.

To start with, the Lottery Grants Board system doesn't justify the status quo government monopoly. If consumers value the work the board hahadoes, they would be free to participate in Lotto-like games with a charitable angle in a deregulated environment.

If consumers don’t value the board’s work, and opt for bigger prize money from for-profit operators, then that should be fine too. After all, the initiatives funded by the board hardly qualify as core government spending: 42 per cent automatically goes to the arts and sport: 15 per cent to Creative New Zealand; 6.5 per cent to the Film Commission; 0.5 per cent to the Film Archive; and 20 per cent to Sport and Recreation New Zealand. The rest goes to other nice-to-haves, including $304,596 in 2010–11 to the Minister’s Discretionary Fund. If consumers don’t value these things, why make paying for them a condition of enjoying Lotto?

There seem to be few risks to the public that justify government control. Lotto’s data and the NZHS both show that Lotto is the cause of very little problem gambling (at the point this isn't the case, one has to wonder why the government encourages state-run gambling through Lotto in flashy ads while also warning against the risks of gambling elsewhere).

Lotto is a consumer product, and like other consumer products there seems to be little good reason for it to be government owned. It should be sold and opened to competition.