Is the Lottery a Tax on the Poor?

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Is the Lottery a Tax on the Poor?
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The lottery is a fixture of American life, with people spending billions on tickets each year. It is the biggest form of gambling in America and a popular way to support public services, but it is also often viewed as a “tax on the poor.” Its popularity is based on a peculiar fact: The winnings from most lotteries are disproportionately distributed among lower-income, less educated, nonwhite Americans. Moreover, it is the most common form of gambling for young adults and a significant portion of the income from ticket sales is used to finance state budgets.

The earliest lotteries were used in a variety of ways, from entertaining guests at Roman Saturnalia parties (Nero was quite fond of them) to divining God’s will (Jesus’ garments were divided by lots after his Crucifixion). But it wasn’t until the nineteen-sixties that state governments began looking for solutions to fiscal crises that would not enrage an anti-tax electorate by raising taxes or cutting services. Lotteries, as Cohen explains, were the answer: “budgetary miracles that made revenue appear seemingly out of thin air.”

In the nineteen-sixties, many states that had previously offered generous social safety nets found themselves struggling to balance their budgets. It was hard to maintain services without hiking taxes or slashing programs, but it was even harder to sell those ideas to voters. Lotteries were a solution that did not require any arduous explanations to the public and drew enthusiastic approval from voters who saw them as an opportunity to win a get-out-of-jail-free card.

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