The Problems of the Lottery

The Problems of the Lottery

Lottery has become a popular pastime for many Americans, and it’s easy to see why. The odds of winning are very low, but the prizes can be enormous—and even a small sliver of hope that you’ll win can keep you buying tickets, especially in hard times. This is not without its problems, though. The lottery can lead people down a dangerous path of debt and reliance on chance. It can also create false incentives for people to spend more money than they should.

Cohen is clear that there are some very real benefits to the lottery, but he argues that the primary reason that state governments adopted it was not a desire to help people who don’t need it; it was because they needed money. The immediate post-World War II period was one in which states could expand their array of services without putting heavy taxes on working and middle class people, but that began to fall apart in the nineteen-sixties, with inflation and the cost of the Vietnam War creating a situation where the government had to raise either tax rates or cut programs, neither of which would be very popular with voters.

In the nineteen-sixties, lottery proponents argued that it would be possible to get around this problem by introducing a new source of revenue. The argument went something like this: the state will take some of the money that people are already spending on ticket purchases, and it will give some of that to those who need it most, while preserving the overall level of funding for other public needs.

To this day, that remains the dominant argument for lottery adoption. But it’s a flawed argument. For starters, it assumes that lottery players are willing to voluntarily spend more of their money on the chance of winning, which is far from universal. Many people who play the lottery hardly ever win, and those who do often wind up bankrupt in a matter of years, owing large sums of money to credit card companies and other lenders.

A more accurate argument for the lottery is that it allows a public institution to raise money for itself in a way that doesn’t require raising taxes or cutting programs. In fact, though, most of the money that is raised by the lottery goes to administrative costs. Only about 10 percent goes to prizes.

As for the regressivity of lottery money, it’s important to remember that the lottery has been a major source of revenue for many of the world’s best universities. Parts of the campus of Columbia University were built with lottery funds, for example. But there is also evidence that, when it comes to gambling, the more you spend, the less likely you are to win. That is a fundamental truth that states need to recognize when they’re considering whether to adopt a lottery.