What has six balls and screws the poor? The lottery.
The crass joke suits the crassly unjust and embarrassingly ubiquitous aspect of public policy. A state-sponsored lottery is a tax—an insidious, regressive, inefficient, and disgraceful one. That these laws have lasted so long speaks to the hypocrisy of politicians, the apathy of citizens, and the power of entrenched interests. Citizens in each of the 44 lottery-sponsoring states should be as ashamed.
The arguments in favor of lotteries are simple. It’s the best kind of tax. It raises money from consenting adults who pay for harmless entertainment and the chance to get rich. Most states then earmark these revenues for the school system. The net effect of these arguments is that state-run lotteries are easy to pass and hard to repeal. A state can create one as a quick fix for a budget in the red or a school system that’s short on cash. And because of the earmarking for education, politicians who try to end the lottery invite their next opponents to fire a barrage of guess-who-hates-kids attack ads.
Since 1964, when New Hampshire established the first modern, state-run lottery in the country, states have steadily repealed near-ubiquitous constitutional prohibitions of them. The few states that do hold out include three from the Bible Belt and Nevada — where casino lobbyists fight the competition.
But lotteries aren’t harmless entertainment. They target the poor and encourage them to squander their limited discretionary income on the illusory promise of spectacular wealth. “Dream bigger,” Kansas tells its citizens. “Anything’s possible,” says Illinois. And Kentucky’s airtight reasoning could (maybe) sell a lottery ticket to a statistician, “Somebody’s gotta win, might as well be you.” Not hard work but luck, say the commissioners, will lead you out of poverty — a message that resonates most among those with the least hope. And lottery commissioners must know their audience, because the poor do play much more often. The North Carolina Policy Watch found that the poorest counties in the state had the highest per capita lottery sales. In South Carolina, households earning less than $40,000 made up only 28 percent of the population, but accounted for 54 percent of frequent players.
During recessions — while people lose jobs and homes, choose which bills to pay and who to stiff, and slash spending on non-essentials — lottery sales spike. At the height of the recession in 2008, 22 states set records for the most yearly sales. Most of these players win little or nothing, but even many of those lucky enough to get rich ruin themselves with newfound wealth.
To make the state-sponsored pickpocketing of the poor more palatable, politicians often promise the money to the schools. But earmarking lottery revenues has little effect, if any, on education spending.
Governments send money from the lottery to the schools, then take money that would’ve gone to schools and put it wherever they want. At the end of the day, states spend the money how they choose — earmarked or not. “In the first year of the lottery, there is a dramatic increase in spending on education. Given a few years, a state would have spent more on education without a lottery,” Patrick Pierce, a political scientist at St. Mary’s College, told ABC News.
As if the gross injustice of a regressive tax and deceptive political maneuverings weren’t damning enough, lotteries are also laughably inefficient taxes. The IRS, for example, spends just half of a penny for every dollar it collects. The average state lottery spends 14 cents for every dollar of revenue in administrative costs. So the average state lottery is 28 times more inefficient than the IRS. Given such a ridiculous statistic, proposals to use a lottery to raise money seem better fit for a Joseph Heller satire than a legitimate legislative agenda.
Next election, candidates will deliver a host of campaign promises and ideals to voters: An inclusive society, a just tax code, small and efficient governance, transparency, and more. See how committed they really are. Ask about the lottery and what they’re going to do about it.
