Lottery and State Budgets


Lottery is a game in which the participants pay an entry fee to participate in the drawing of prizes based on chance. These prizes may be cash or goods. The word lottery is probably derived from the Dutch phrase, loten, which means fate or fortune, and may be a diminutive of the Middle English noun lot. The game is a popular form of gambling in the United States and is regulated by state governments. It is a monopoly industry, with the profits being used to fund government programs.

The history of lottery dates back as far as ancient times, where it was sometimes deployed as a party game-for example, during Roman Saturnalia dinner parties guests were given tickets to draw lots for fancy dinnerware and other items of unequal value-or as a way to divine God’s will. In the modern era, it became a widespread form of entertainment with states organizing state-wide contests for prizes to raise money for public works. The game is also popular in many foreign countries.

In the twentieth century, the lottery became a mainstay of American society, with people spending upwards of $100 billion in 2021 on tickets. It’s the country’s most popular form of gambling, and states promote it as a good way to raise revenue without raising taxes. But just how meaningful that revenue is in broader state budgets, and whether the trade-offs are worth it for taxpayers, is debatable.

Cohen’s book, though it nods to the early history of lotteries, focuses chiefly on the modern incarnation. It started, he writes, in the nineteen-sixties as growing awareness of all the money to be made in the gambling business collided with a crisis in state funding. For states with generous social safety nets, inflation and the costs of the Vietnam War meant that balancing the budget became impossible without raising taxes or cutting services, which would be highly unpopular with voters.

This changed the tenor of the debate. Proponents no longer tried to sell the lottery as a magic bullet that would float state budgets. Instead, they argued that it could be used to fund one line item, usually education but occasionally elder care or parks or aid for veterans. This new narrative made legalization seem less like a gamble and more of a moral imperative.

Lotteries also tangled up with slavery, as when George Washington managed a Virginia-based lottery that gave away human beings. Denmark Vesey, who bought his freedom in a South Carolina lottery, went on to foment a slave rebellion. But the majority of the time, lotteries were just a way for wealthy white men to avoid paying their fair share of state taxes while gaining a little extra on top of it. The lottery is a symbol of America’s uneasy relationship with inequality. It’s a form of gambling that is incredibly popular and widely accessible, even as it’s wildly distorted by corruption, fraud, and addiction. And it’s an industry whose profits are often siphoned off from poor and working-class communities.

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