Public Welfare and the Lottery




State-sponsored gambling has become a hallmark of American society, but few, if any, states have a coherent “lottery policy.” Policy decisions are made piecemeal and incrementally, and public welfare is rarely taken into consideration. The result is that state lottery officials often find themselves trapped by the industry’s evolution, with their authority largely confined to raising revenues and managing a public service.

The biggest message that lottery commissions rely on is that playing the lottery is fun. This reframes the experience and obscures the fact that people play the lottery for money, which they may then use for other purposes. It also masks the regressivity of the activity, because lottery players often spend a significant portion of their incomes on tickets.

People from all walks of life and income levels buy lottery products, just as they would any other consumer good. The majority of winners are low-income, and some have found the prize money to be a ticket out of poverty. Other winners may have a financial need to spend their winnings on medical bills or funeral expenses, and some choose not to take the money at all. Unclaimed prizes reenter the prize pool to increase the payout on future games.

Despite these concerns, most people agree that the lottery has some social benefits. The most cited benefit is the money that it raises for states. But this claim is rarely put in context of overall state revenue. The truth is that the lottery is a form of taxation, and it raises taxes from lower-income families, who are less likely to vote for politicians who support it.