For many Americans, the official lottery has become a way to get a little bit of tax relief. But just how much revenue that lottery money generates, and whether it’s worth the price of people losing money in the process, is up for debate.
Lotteries first emerged in the immediate post-World War II period, Cohen writes, when states faced the pressure of maintaining an ever-expanding array of services without raising taxes. They claimed that the lottery would bring in huge sums of money—as much as half a billion dollars—that would help them avoid ever having to raise taxes again and keep them from getting punished at the polls.
In reality, however, the lottery is just another form of gambling, Cohen says, with the same basic commercial structure as other forms of gambling like casinos and video games. The state runs it as a business, not a government agency, and its profits are dependent on the number of people who play.
As soon as one state starts a lottery, Cohen notes, it’s not uncommon for neighboring states to follow suit. And the games themselves are often designed to be addictive. They use the same psychological tricks that tobacco companies and video-game makers do to make sure players keep coming back for more, he adds.
While some defenders of the lottery say that it is not a tax on stupidity—that players know they’re unlikely to win—Cohen points out that lottery spending correlates with economic fluctuations, and sales increase when unemployment or poverty rates rise. And, as with all commercial products, lottery advertising is heavily concentrated in poor communities.