The official lottery of the United States is a tax-generating institution, protected by law and regulations. It is funded, in large part, by players who buy tickets to win prizes.
There is a lot of money to be made in the lottery business, and lots of people who want to be rich. But there is also a dark side to the lottery: it is a regressive revenue source that takes a heavy toll on low-income Americans.
It is not a coincidence that state lotteries often market and sell tickets to low income communities at higher rates than to wealthy ones, researchers have found. These communities are disproportionately Black and brown and often are unable to afford the tickets, according to researchers at the Howard Center for Research on Poverty, Work, and Public Policy.
That is because the games are regressive: they attract more low-income gamblers than high-income ones, with lower-income people spending a greater share of their budget on scratch-off instant-game tickets than on the huge jackpot drawings. The regressivity of the lottery is an issue of both economic and political importance.
In fact, the lottery has made it harder for state legislatures to raise taxes on vital services–schools and health care–by making them appear as if they were getting money out of thin air. It has also encouraged legislators to rely more on public relations to persuade voters that they are supporting schools and other essential services.
In addition, the state-run lottery often creates inequities by disproportionately benefiting college students and wealthier school districts far from the neighborhoods where lottery tickets are sold. That is a big problem, because it shifts the money from poor people to people who can afford to pay for their education.