A state lottery is a highly profitable enterprise, bringing in billions of dollars annually. And it has specific constituencies: convenience store owners (lotteries often run in the same stores as regular merchandise), lottery suppliers (heavy contributions to state political campaigns are regularly reported); teachers (in states that earmark lottery revenues for education); state legislators who quickly grow accustomed to the additional revenue; and players like Standifer, who fund the system by losing a total of about $29 billion each year.
Lotteries are able to sustain their profit levels through a unique confluence of factors: the public’s love of gambling; the desire to siphon funds away from illegal gambling; and state budget shortfalls that are impossible to raise through normal taxation, creating an appetite for any new source of revenue. And for the most part, the system works: no state has repealed its lottery since the first modern incarnation began in 1964.
While critics have pointed to lottery profits as a form of regressive taxation, supporters counter that the system enables states to provide services that voters want without raising taxes, or at least not by a significant amount. But this argument has limited utility; voters have gotten used to low taxes, and are reluctant to return to a higher rate of taxation. Moreover, as Cohen points out, the lottery does not necessarily reduce the prevalence of gambling in society or reduce its costs to society. On the contrary, research shows that the ubiquity of lottery play leads to greater gambling addictions and less ethical behavior overall.