How the Lottery Helps State Budgets

Lottery stories of big winners and out-of-the-blue scratch ticket miracles are routinely featured across American media. The lottery is a popular game that contributes billions to state budgets and helps subsidize a wide variety of government services. For many people, the entertainment value and other non-monetary benefits of playing outweigh the disutility of losing money. The odds of winning, however, are much more onerous than most players realize.

The problem, writes Cohen, is that the lottery plays on people’s deepest desires—those to covet money and the things it can buy, even though “coveting is a sin” (Exodus 20:17). This sinful urge is reinforced by the message that “you can win the lottery and have it all”—and then you’ll be happy forever. Lottery marketers know that these messages are effective, and they are constantly trying to come up with new ways of tempting gamblers.

While lottery profits have long been a key source of state revenue, Cohen points out that it’s become increasingly difficult for governments to maintain their social safety nets without raising taxes or cutting services. In the nineteen-sixties, rising inflation, a growing population, and the cost of the Vietnam War created a perfect storm that made it impossible for states to balance their budgets. To get around the issue, lawmakers turned to the lottery.

Advocates of the lottery argued that it would float most state budgets and thus free politicians from having to choose between raising taxes or reducing government spending on public goods. But when lottery figures began to show that it was not the silver bullet that advocates hoped for, they adjusted their pitches. Instead of arguing that the lottery would fund a state’s entire budget, they began to focus on a single line item—often education but also elder care, public parks, or aid for veterans. This narrower argument made it easier to campaign for legalization, since a vote in favor of the lottery was a vote for a particular service.

Moreover, the lottery is particularly attractive to low-income and working-class people, who tend to spend more than their richer counterparts on tickets. In fact, according to a recent study by consumer financial company Bankrate, lottery players making more than fifty thousand dollars a year spend, on average, only one percent of their annual income on tickets; those earning less than thirty thousand dollars, in contrast, spend thirteen per cent. Furthermore, lottery advertisements are heavily promoted in neighborhoods that are disproportionately poor, black, or Latino. This demographic disparity contributes to the high rate of lottery gambling among these groups. But the problem with lotteries is deeper than just their appeal to covetous people and their propensity to generate false hopes of wealth. They are also a form of redistribution that rewards some people more than others. This is why it’s important to consider the consequences of a lottery policy before supporting it with your vote.