The Regressive Underbelly of the Lottery

The casting of lots for making decisions and determining fates has a long record in human history. The first recorded lottery to distribute prize money was held in 1466 in Bruges, Belgium, for the announced purpose of providing assistance to the poor. Since then, lottery games have become one of the world’s most widespread forms of gambling, fueled by increasing economic inequality and new materialism asserting that anyone can get rich if they try hard enough or are lucky enough. In addition, anti-tax movements have led lawmakers to seek alternatives to raising taxes and lotteries have proven remarkably adaptable as such alternatives.

The structure of most state lotteries is quite similar: a legislature creates a monopoly for the lottery (usually by passing legislation or licensing a private company) to run the operation; it begins with a modest number of relatively simple games; and, in response to continuous pressure for additional revenue, progressively expands the size and complexity of its operations, especially through the introduction of new games. This expansion has been accompanied by aggressive advertising to attract the attention of potential players and to engender support from specific constituencies: convenience store operators; lottery suppliers (heavy contributions to political campaigns by suppliers are often reported); teachers (in states where lottery revenues are earmarked for education); state legislators (who become accustomed to a steady flow of tax dollars); etc.

While the growth of lottery operations has benefited states and promoted widespread participation, it has also masked a troubling underbelly: regressive and sometimes harmful effects on the poor and problem gamblers. The regressive aspects of lotteries are a direct result of their being run as businesses whose primary function is to maximize revenues through gambling. Because of this, they must continually promote their product to persuade people to spend a large proportion of their incomes on the hope that they might win.

There is no evidence that the vast majority of lottery players are committed gamblers, but most do not take their chances lightly. In fact, they tend to be heavier gamblers than the average American. Their spending is further accentuated by the regressivity of lotteries, which typically require lower-income individuals to spend more on tickets than people with higher incomes.

A common strategy is to choose a combination of numbers that have a high probability of occurring in the winning drawing, such as birthdays or sequential digits that appear frequently on other lottery tickets. Harvard statistics professor Mark Glickman points out, however, that if you win with these numbers you will have to split the prize with other players who chose those same numbers. In his opinion, it would be better to select random numbers or buy Quick Picks.

While state lotteries promote the message that even if you lose, you will still feel good about yourself because you did your civic duty by buying a ticket, they seldom put this in context of overall state revenues. They rely on two messages primarily. The first is to sell the idea that lottery play is fun, an experience which obscures its regressivity and the fact that people spend a large portion of their incomes on it.