The Official Lottery is Run by the State and is a Business

The official lottery is run by the state and is a business. There’s a story behind it, and it starts in the nineteen sixties, when growing awareness of all the money to be made in gambling collided with a crisis in state funding. Thanks to a rising population and the war in Vietnam, the economy began to slow down, and states found it increasingly difficult to balance their budgets without either raising taxes or cutting services. Both options were extremely unpopular with voters.

Lotteries looked like an answer. Advocates claimed that by filling state coffers with hundreds of millions of dollars a year, they would keep government spending in check and spare average citizens the unpleasant choice between taxes and cuts. But, as Cohen points out, the evidence quickly put paid to that myth. The first legal lotteries brought in a fraction of what advocates had promised, and state governments soon began to look elsewhere for ways to raise revenue without offending their constituents.

They shifted gears, and now, instead of trying to convince voters that the lottery is good because it does some good, they focus on selling it as a fun experience. But that’s a misdirection that obscures the regressive nature of the lottery, and obscures how much people actually spend on it. The state’s official platforms now sell far more instant scratch-off games, which tend to attract lower income Americans, than huge jackpot drawings. And when those low-income gamblers win, their rewards aren’t just cash: they also receive a stream of payments in annual graduated installments.