The Pros and Cons of Official Lottery Games

Official lottery games have become a mainstay of American life, with Americans spending more than $100 billion a year on their tickets. For politicians desperate for money but unwilling to impose sales or income taxes (or risk the electoral consequences), lotteries seemed like budget miracles, writes Cohen. As long as winners’ ticket purchases exceeded administrative expenses, the state’s profit was guaranteed.

But critics see more sinister motives in the lottery’s rise: Lottery sales increase as incomes fall, unemployment soars, and poverty rates climb. State officials advertise heavily in poor and working-class neighborhoods, where the chances of winning are greatest. Some people see this as a form of “regressive taxation,” which burdens those least able to afford it.

In addition, some states withhold a portion of the prize to cover initial state, federal, and local taxes. A winner who chooses to receive a lump sum can expect a much smaller amount than the advertised jackpot, as withholdings can cut the final payout by more than half.

Those who oppose the lottery argue that it promotes bad habits, especially gambling addiction, which can have devastating social and financial costs for individuals, families, and communities. They also point to the lack of evidence that it helps control crime syndicates or reduce gambling’s illicit profits, and they contend that the lottery erodes public confidence in government. But supporters say that the lottery responds to an insatiable demand for gambling, and that the benefits outweigh the harms.