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Lottery Taxes

Lottery Taxes


Lottery is a game of chance where a bettor writes down or otherwise marks a series of numbers or other symbols on a ticket, which is then submitted to the lottery organization for shuffling and selection. Then there’s a drawing, and the person who picks the most winning numbers gets a prize. The top prize is often a fixed amount of cash or goods. More recently, prizes are based on a percentage of total receipts.

A lottery can be a great way to raise money for public projects. But it can also be a regressive tax. People who play the lottery spend a disproportionate share of their incomes on tickets. And they’re largely lower-income, less educated, and nonwhite.

Many states have legalized gambling, including state-run lotteries. But the battle over lottery funding is still raging. Some organizations like Stop Predatory Gambling argue that state-run lotteries promote gambling and undermine social programs, while others say they’re a safe and effective way to raise revenue for education and other needs.

The first recorded lotteries offered tickets with a guaranteed prize of money in the Low Countries in the 15th century. Their popularity grew during the post-World War II period, as states began to expand their array of social services without especially onerous taxes on working people. The huge jackpots that drive lottery sales are an added bonus, as they get a ton of free publicity on news sites and TV shows.