The Problem With the Lottery
The lottery is a game in which participants pay money and hope to win prizes, often money or goods. The earliest lotteries were used as party games-Nero, for example, loved to play them-or to divine God’s will (as evidenced by Jesus’ garments being cast in lots at his Crucifixion). Later, they became a popular way for states to fund everything from town fortifications to charity for the poor. In the immediate postwar period, lottery proceeds enabled states to expand their social safety nets without especially onerous taxes on the middle and working classes. But by the late nineteen-sixties, the arrangement was beginning to break down, as inflation and war costs pushed state budgets out of control. In response, a wave of new states adopted lotteries, mostly in the Northeast and Rust Belt. Their proponents promoted them not as a tiny drop in the bucket of state government but as a silver bullet that could end taxation forever.
People who buy tickets know the odds are long. But they keep buying them because they have a persistent, ineffable gut feeling that it’s somehow their last, best, or only chance to win. They spend over $80 billion on tickets each year, the average household spending more than $400 per month. That’s a lot of cash that would be better spent on emergency savings or paying off credit card debt.
Super-sized jackpots, which drive ticket sales, are no accident. They’re a marketing tool, designed to attract attention and public support for the game. They’re also a financial necessity, as the prize pool needs to cover costs of organizing and promoting the contest, and a share for profits and sponsors. And when the jackpot doesn’t get hit, it rolls over to the next drawing, boosting the odds and the publicity.
A lottery’s biggest problem, however, is that it carries the message that the money it raises for the states is a good thing, even if you don’t win. That’s the underlying assumption behind the ad campaign that launched after the Powerball jackpot hit seventy-two billion dollars, whose tag line was: “More people have won the lottery than ever before—and you can too.”
Rich people do play the lottery, of course; one of the largest-ever jackpots was won by three asset managers from Greenwich. But they purchase fewer tickets than the poor, and their purchases represent far smaller percentages of their income. And while they may feel a moral obligation to contribute to society by playing the lottery, it’s a mistake to think they’re doing anyone a favor. Their actions are a reminder of how the lottery’s original promise of a tax-free alternative to high property and income taxes has been transformed into something much more like an unofficial hidden tax. That’s a message that needs to change.