The Hidden Tax of the Lottery


The lottery is a game in which participants pay money and hope to win prizes. Prizes may be cash, goods, or services. The prize amount varies depending on the number of tickets with matching numbers. People are usually allowed to purchase tickets from a central agency, although some states allow private sellers as well. In addition to the main financial lottery, there are also many other types of lotteries, including those that award units in subsidized housing developments and kindergarten placements.

Lotteries have long had a bad reputation, and not without justification. In their early days, lotteries were tangled up with slavery and often offered human beings as prizes. George Washington managed one lottery whose prizes included slaves, and a formerly enslaved man won a South Carolina lottery and used the winnings to foment a slave rebellion.

Despite these controversies, state-run lotteries have become a major source of revenue for many governments. In the nineteen-sixties, however, the growing awareness of the profits to be made in gambling collided with a crisis in state funding. As the population exploded and inflation soared, government budgets grew ever more strained. In a bid to balance their books, state leaders decided to promote the lottery in an effort to raise money without increasing taxes or cutting social welfare programs.

The idea was that if people were going to gamble anyway, the government might as well collect some of the proceeds. This reasoning gave legitimacy to lotteries, even though it didn’t address the more troubling ethical questions. But it also obscured the fact that state-run lotteries are a hidden tax on poor and working-class families, who spend far more than middle-class families on tickets.

What is most disturbing about the lottery is how it targets poor and black families in particular, writes Cohen. It is a form of regressive taxation that exploits the psychological vulnerabilities of some people, who feel they do not have other ways up. In the United States, for example, people of color make up sixty percent of the lottery’s player base. In addition, the promotional campaigns for the lottery are geared towards poor neighborhoods and often feature images of white faces with African-American hairstyles.

The state is right to promote its lottery as a way to help children and other public goods, but there are more important issues at play here than the size of jackpots and the amount of publicity they generate. Lottery marketing also relies on the message that people who play are doing their civic duty, and that even if they lose, they’ll feel good about themselves because they were supporting the public good. This is a dangerous and false narrative that needs to be challenged. It is time to think about changing the lottery’s culture and making it more transparent for all players.