In America’s antitax era, state lottery is often seen as a good way to raise funds for government services without raising taxes. Lottery revenues, however, are not as transparent as a normal tax and consumers generally do not understand the implicit tax rate on their tickets. In addition, many states pay out a significant portion of their sales in prize money which reduces the percentage that is available for state revenues or use on things like education.
While a handful of players may win large amounts, most do not. Rather, lottery players contribute to the system by spending an average of $230 a year on tickets. That’s money that could be saved for retirement or used to pay off credit card debt. Instead, it helps fund a range of social causes that can’t be funded without the lottery’s profits.
Moreover, the Howard Center found that lottery advertising focuses on persuading target groups to spend their money on the games and doesn’t consider whether this promotes problem gambling or unfairly excludes low-income people. Combined with the fact that lotteries are run by private businesses that profit from the system, it is clear that states’ lotteries are running at cross-purposes with the public interest.
In order to ensure that the public’s interests are protected, all lottery prizes shall be awarded in a manner that is fair and equitable. Specifically, the following provisions are required: