The lottery is an incredibly popular game in the United States that dishes out billions of dollars each year to a small percentage of paying participants. Some of the money is used to pay costs for organizing and promoting the game, some goes as revenues and profits, and the rest is awarded as prizes. There are many different types of lotteries, from a simple raffle to one where people choose groups of numbers to be picked by machines. Regardless of the type, a lottery requires that people pay money to play, that the odds of winning are very low, and that winners be selected at random.
A central argument for legalizing the lottery has been that it is a source of “painless” revenue, with players voluntarily spending their money in exchange for a chance to help support a government service. But that argument is flawed in several ways. For one, the popularity of a lottery does not seem to be tied to a state’s overall fiscal condition; in fact, lotteries often win wide public approval even in times when taxes or other government revenues are low.
In addition, the lottery’s emphasis on a “painless” financial benefit has obscured broader social implications of this gambling activity. For instance, it is known that lotteries are regressive in terms of their impact on lower-income households. And research suggests that people who play the lottery spend more time on other leisure activities and less on education, even after controlling for income and other factors.
While the state-run lotteries that operate today have departed considerably from their origins in colonial America, their basic structures remain largely unchanged. These lotteries typically begin with a legislative monopoly; set up a public agency or corporation to run the business; begin with a modest number of relatively simple games; and rely on revenues that are derived from the sale of tickets to subsidize operations and add new games. The latter strategy is inherently regressive, since ticket sales tend to increase with the size of the prize.
Finally, because state lotteries are businesses that seek to maximize revenues, their advertising necessarily focuses on encouraging people to spend large amounts of money on tickets. This marketing approach raises questions about whether a government function like the lottery is appropriate for promoting gambling, which can have negative impacts on the poor and problem gamblers.
Despite these criticisms, the lottery continues to be a popular pastime that raises billions of dollars each year for state coffers. But if the industry is to continue to expand, it will need to shift its focus from a message that emphasizes the benefits of a painless tax to one that highlights the fun and excitement of playing. Otherwise, the lottery’s appeal to the average American may eventually fade. That will mean a loss of an important cultural tradition—and, perhaps, the painless tax that funded it in the first place. This essay is adapted from an article by Richard Cohen that appeared in the October 2017 issue of The New Yorker.