The Lottery is a familiar fixture in American society. It’s the country’s most popular form of gambling, and it’s promoted by states as a way to raise revenue without raising taxes. But just how meaningful that revenue is in broader state budgets, and whether it’s worth the trade-off to people who lose money, are up for debate.
I’ve talked to lottery players who spend $50 or $100 a week on tickets. They tell me that the winnings aren’t enough to fund a decent life, but they’re still worth it because of all the pleasure they get from playing, reducing stress after long days, and being excited to wait for results each week. And they’re not alone: In 2021, Americans spent up to $100 billion on lottery tickets.
Supporters of the Lottery argue that it provides a way for the government to fund critical public services, including education, without raising taxes. California’s lottery, for example, has contributed $39 billion to the state’s schools over its history. But critics point out that lottery money often goes toward things like sports stadiums and other projects that benefit a small fraction of the population, while neglecting more essential needs.
And the fact is that Lottery does tend to have a regressive impact on society, with lower-income residents spending a higher percentage of their incomes on tickets. It also comes with hidden costs that are hard to quantify, such as the time and energy it takes to buy a ticket, the risk of losing it or forgetting it, and the opportunity cost of spending that money on something else.
The biggest argument against Lottery is that it’s just a form of gambling. But gamblers already have plenty of options — casinos, horse races, and financial markets — which all expose them to the same risks. And if you take the time to look at the odds, it’s hard to make a case for the superiority of any one option over another. The only thing that separates the Lottery from other forms of gambling is that it’s supposed to be for “good causes.” But the evidence shows that it has a similar regressive impact to other forms of taxation and should be treated the same. As a result, Lottery should be carefully scrutinized before being promoted by the government. It’s not a good idea to encourage addiction to irrational gambling.