Lottery Taxes and Public Services


Lotteries are a form of gambling in which prizes, typically money or goods, are allocated by random selection. They are often regulated by law and a portion of the revenue from ticket sales is distributed to public services such as education and road construction. A number of government and private entities run lotteries, including commercial enterprises such as casinos.

The practice dates to ancient times. The Old Testament instructs Moses to take a census of Israel and divide the land by lot, while Roman emperors used lottery-like draws to give away property and slaves. In the early American colonies, lotteries were popular despite Protestant proscriptions against gambling. Lotteries were a major source of funding for colonial construction, universities, and public works projects, including the Boston town hall. The Continental Congress even held a lottery to help finance the Revolutionary War.

By the early nineteen-seventies, though, state governments were facing financial crises. They had expanded their array of services without raising taxes, but that arrangement began to collapse as the gap between rich and poor widened, pensions and job security eroded, health-care costs rose, and unemployment surged. State revenues plunged, and many legislators embraced the idea that the lottery was a way to raise huge amounts of money quickly, allowing them to avoid taxes for decades.

Cohen writes that state politicians viewed the lottery as a “budgetary miracle, the chance for states to make revenue appear seemingly out of thin air.” They argued that if they could convince people to play the lottery, they would be able to maintain their current programs without having to increase taxes. And, they claimed, people’s aversion to taxation meant that they wouldn’t even have to ask voters to approve new levies.

But this argument is flawed. Lotteries are regressive: The more money that a jackpot is, the lower the odds of winning. The fact is, the only reason people continue to buy lottery tickets is because they enjoy them. They get entertainment value and feel that they’re playing a fair game, a justification that’s undermined by the fact that most of them spend large percentages of their incomes on them.

Lottery commissioners have come to recognize that the regressive nature of their games is a liability, so they’ve shifted tactics. Instead of telling people to play, they’re now trying to persuade them that playing the lottery is a fun experience and that they can win big. This coded message obscures the regressivity and distracts from the true cause of the lottery’s popularity: people’s desire to become rich quickly. It also reinforces the mistaken belief that wealth is a meritocratic achievement and that hard work will pay off in the end. This isn’t a good way to build a society. It’s time to stop the lottery.