The Official Lottery

The official lottery, or state-run gambling, is a recurring government enterprise that depends on chance to raise money for the state. But despite its reliance on chance, the lottery is a complex business with many moving parts. It involves an intricate system of checks and balances that includes the oversight and regulation of a multibillion-dollar industry, a network of private contractors who handle all the logistics and marketing, and the millions of people who play each week. This makes the lottery a very public and controversial enterprise.

States rely on the lottery as a way to maintain their social safety nets without raising taxes, writes Cohen. During the late-twentieth-century tax revolt, states looked for ways to finance services without annoying an anti-tax electorate and found themselves turning to the lottery. Lottery games, they argued, would bring in hundreds of millions of dollars and free them from the politically unpalatable task of hiking taxes.

But the truth is that lotteries are no budgetary miracle, and they can even backfire on politicians. While they do bring in big bucks, they’re inefficiently collected and, overall, amount to just a small drop in the bucket for actual state governments.

Lottery advocates claim that everyone loves to gamble, and states should take advantage of that inextricable human impulse to try their luck. But critics point out that lotteries prey on the poor and working class, with data showing that they’re played disproportionately by those with lower incomes. This, they argue, is a form of regressive taxation that penalizes the poor while rewarding the rich.