One in eight Americans buys a lottery ticket every week. The winners, however, are disproportionately lower-income and less educated than their nonplaying counterparts, and are also more likely to be minorities. This disparity is partly because lottery tickets are often distributed through schools and churches, and partly because, according to a 2012 study published in the Journal of Community Psychology, lottery outlets tend to be clustered in neighborhoods with large numbers of poor, minority residents. In addition, people who receive scratch-off tickets as gifts are more likely to develop gambling addictions.
It’s not just that the lottery is a scam—it’s that it’s a big part of our economy, and its success depends on the inextricable human impulse to gamble. In this sense, the lottery is like a drug, and state lotteries are not above using psychological tactics to keep their customers hooked. This is not new: tobacco companies and video-game manufacturers employ many of the same strategies; the difference is that the products they promote aren’t typically sold under state auspices.
The history of lottery can be traced back to medieval Europe, where town records of the 15th century show that some towns used a lottery to raise money for walls and fortifications. By the 1960s, states were looking for ways to fund more social services without infuriating anti-tax voters, and the first state-run lotteries started in the Northeast. By the end of the decade, sixteen states had started lotteries (Connecticut, Illinois, Iowa, Kansas, Kentucky, Maine, Minnesota, Montana, North Carolina, Ohio, Rhode Island, South Dakota, Texas, and Vermont).
While the national consensus is that the lottery has little regressive effect, Cohen finds that it’s not so simple. State-run lotteries are, in fact, a big reason why taxes are falling across the country. In the years after 1964, lottery revenue soared as more and more states sought out solutions to their fiscal woes that wouldn’t enrage their tax-averse constituents.
As a result, the poor are the biggest players in most states, and they spend an average of two per cent of their income on tickets. In contrast, those who make more than fifty thousand dollars a year purchase just one per cent of their income on tickets. This disparity is even more pronounced when considering that the largest jackpots tend to be won by middle-class or wealthy players. In an era where economic inequality is on the rise, that’s not good news. The lottery is a major contributor to the widening wealth gap. It’s time to stop subsidizing it.
