How Does the Lottery Fit Into State Budgets?
The lottery is a fixture of American life, and it’s one that merits serious scrutiny. People spend upwards of $100 billion on tickets every year, and states promote these games as a way to raise revenue that’s relatively painless for taxpayers (and which is, in any case, better than raising taxes). But how meaningful this revenue actually is in broader state budgets is debatable.
Lotteries have a long history in America, and they are a particularly important source of gambling revenue because they allow states to fund a variety of services without imposing the onerous taxes that come with direct funding from citizens. The first lotteries were organized to help fund the early settlement of the colonies, and they were often run by church groups and other philanthropic organizations. In fact, despite Protestant prohibitions against gambling, many of the country’s finest colleges and universities owe their existence to the generosity of lottery players.
During the immediate post-World War II period, a growing number of states expanded their social safety nets with the help of lotteries. But, by the nineteen sixties, state finances started to sour on the back of an expanding population, rising inflation, and the cost of the Vietnam War. Balancing a budget became more difficult, and many voters began to think that increasing taxes or cutting services were the only options available.
Legalization advocates repackaged the lottery as a statewide silver bullet that would cover a single line item—often education, but sometimes elder care or public parks, for example. This approach worked well, and it enabled supporters to argue that a vote for the lottery was not a vote for gambling but a vote for children. In a world where political polarization is rampant, this gambit was a wise one.
But, critics point out that lottery advertising is largely misleading in how it presents the odds of winning. The figures are frequently inflated and, when the prizes are paid in equal annual installments over 20 years, inflation and taxes dramatically erode their current value. And, because lotteries are run as businesses with a focus on maximizing revenues, they are at cross-purposes with the larger public interest.
When it comes to selecting lottery numbers, try to avoid sticking to predictable sequences like a number that matches your birthday or a series of consecutive numbers. Instead, opt for a range of different numbers that end in different digits—this will increase your chances of hitting the jackpot. In addition, buy more tickets to increase your chances of winning.
