The Lottery’s Role in State Budgets
Lottery has long been a popular way to raise money for public projects. Unlike traditional taxes, which tend to be disliked by the public, these games are considered painless and easy to administer. Since the 1970s, most state lotteries have adopted a similar model: The state establishes a monopoly; hires a public corporation to run the lottery and pays no commission to private promoters; starts with a modest number of relatively simple games; and, as revenues grow, introduce new games to keep revenues high.
People spend more than $100 billion on these games every year, making it the most popular form of gambling in America. But just how big of a role they play in state budgets is less clear, and the trade-offs for low-income communities deserve scrutiny.
Historically, lotteries were often used as a way to distribute property or slaves in the colonial era, as well as to finance both private and public ventures. Benjamin Franklin sponsored a lottery to raise funds for cannons to defend Philadelphia against the British, and George Washington sought a grant from Congress to build a road across the Blue Ridge Mountains.
In modern times, state-run lotteries are generally perceived to be a good thing, helping to alleviate the strain of rising education costs and health care costs on state budgets. But there’s a dark side to this argument, and it comes down to the way that states market the lotteries. Rather than simply telling people that playing is fun, they use a coded message that obscures the regressivity of the games and glosses over how much the poor spend on them.