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The Benefits of Raising Tax Revenue From the Lottery

lottery

A lottery is a form of gambling in which people buy tickets and hope that some combination of numbers will be drawn at random. While critics of the practice argue that it encourages illegal gambling and may contribute to problems such as poverty, addiction, and crime, supporters say that if done properly, the lottery can benefit society by raising money for important public services. In addition, they contend that it can be an effective means of raising revenue without onerous taxes on the middle class and working class.

The word lottery, as used in modern English, translates from the Dutch as “fate” or “luck.” Lotteries are also called raffles or draws. They are a popular way to raise money for a variety of causes, including education, public parks, and veteran care. In the United States, state-run lotteries have become a common source of tax revenue and are among the most popular forms of gambling.

Unlike most other forms of gambling, which require a certain level of skill to play, the lottery is based solely on chance and therefore appeals to many people regardless of their ability to think critically or analyze odds. The likelihood of winning a lottery prize depends on the size of the jackpot and how many tickets are sold. The larger the jackpot, the lower the odds of winning. In order to maintain a high interest in the game, lottery officials keep reducing odds, which reduces the value of each ticket and increases the number of people who need to purchase a ticket in order to win.

Lotteries have a long history in America, with colonial-era lottery games raising funds for a range of purposes. Benjamin Franklin held a lottery to help fund the American Revolution, and George Washington sponsored a lottery to build a road across the Blue Ridge Mountains. State lotteries gained popularity in the post-World War II era, when states could expand their array of social safety net programs without incurring especially heavy taxes on the working and middle classes.

Advocates of state-sponsored lotteries argued that they were a “painless” form of taxation, and that people would voluntarily spend their money in exchange for the chance to gain a significant sum. They also promoted the message that a vote for the lottery was a vote in favor of a specific line item in a state budget, often education or elder care or veterans’ assistance.

But as lottery advertising shifted from the general population to specific constituencies—convenience store owners and operators, suppliers (heavy contributions from these groups to state political campaigns are routinely reported), teachers (in states where lotteries provide earmarked revenues for education), and state legislators themselves—it became harder to make the case that the new approach was in the public interest. Today, as the lottery continues to attract a large segment of the population, it has begun to raise serious concerns. This article was originally published in the November 2018 issue of The American Prospect.