The Regressivity of Lottery Play

A lottery is a game of chance in which numbered tickets are sold for the right to win prizes, often money. Lotteries have long been used to raise funds for various public projects and activities, such as paving streets, building schools, and erecting bridges. They have also been a source of public discontent, as the winners are generally chosen by chance selections rather than skill or merit. Some governments have banned the lottery, while others endorse and regulate it. In the United States, there are state-sponsored lotteries as well as private ones.

In the immediate post-World War II period, lotteries gave state governments a means to expand their range of services without onerous taxes on working and middle class families. In a neo-liberal age, though, that arrangement is coming to an end. In the meantime, many citizens are spending more than $80 Billion on lottery tickets each year, money that could be better spent on a rainy day fund or paying off credit card debt.

The problem is that, in the end, lottery players are not winning that much money. And, because they spend so much to play, they are consuming an awful lot of the resources of state government. The result is that the states are growing more and more dependent on these “painless” lottery revenues, and the pressures to increase them are ever mounting.

What’s more, these taxes disproportionately affect poor people. Studies show that the bulk of state lottery participation and revenue come from middle-income neighborhoods, while far fewer low-income people participate at all. It’s no wonder, then, that state legislators are quick to promote the idea of a federally regulated national lottery, as a way to distribute tax dollars more fairly across the country.

There’s also a weird psychology at work. Although most lottery players are aware that the odds of winning are extremely low, they keep playing anyway. The reason is that they are motivated by this sense of entitlement, this belief that if they can just hit it big, they’ll be rich and happy. It’s a bit like watching a movie with the sound turned off – you know the outcome, but you keep listening because you can hear the dialogue.

It’s important for people to understand the regressivity of lottery play and what it means for state budgets, particularly in this era of anti-tax fervor. Instead of promoting the idea of a fair and transparent lottery, it’s time to think about what kind of a lottery we actually want. And, that starts with a conversation about how much money we really need to help everyone live a secure and prosperous life. Then we can discuss how that money should be spent. It’s not enough to just raise the minimum wage, for example. We need to create a more generous welfare safety net, and that requires money. And that money, of course, comes from the lottery. And, that money has to be collected from the players who believe in it.