This typically happens when you already have a DNS server running on
your machine.

Do you have bind9 (named) installed by any chance?

If so, either remove it (if you don't use it) or configure it to only
bind to the IP addresses that you want it to respond on, otherwise its
default configuration conflicts with dnsmasq's DNS server running on
lxdbr0 leading to the error you received.

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https://bugs.launchpad.net/bugs/1609798

Title:
  dnsmasq failed to create listening socket. Address already in use.

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