Lottery is a popular way for states to raise revenue. But what are we really getting for our money? This article explores the many ways in which lottery revenues are spent – and how those decisions may affect the public.
People in the US spend upwards of $100 billion a year on state-run lotteries, making it the nation’s most popular form of gambling. Yet we rarely question the value of this revenue source, despite the fact that it’s essentially a hidden tax on our daily lives.
A lottery is a competition based on chance in which numbered tickets are sold and prizes awarded to the holders of numbers drawn at random, usually as a means of raising funds for a cause. The word lottery is thought to have been derived from the Dutch verb loten (“to draw lots”), itself an abbreviation of the earlier Middle Dutch noun lot (“fate”).
The first state-sponsored lotteries began in the Low Countries in the 15th century. The proceeds from these early lotteries were used for a wide variety of purposes, including paving streets and building churches. Today, state lotteries have become a vital source of public funding for many programs, from public education to transportation infrastructure.
While the popularity of lotteries fluctuates with the state’s financial health, their support is often based on the view that proceeds benefit a particular public good, such as education. The results of a number of studies, however, suggest that this argument is largely misleading. For example, it is well known that the majority of players and lottery revenues come from middle-income neighborhoods and that the poor participate at far lower rates than their percentage of the population.