The State Lottery and Its Critics

state lottery

The state lottery is a high-risk, low-return enterprise. Yet, it lures lawmakers looking for easy revenue without proposing higher taxes. And it offers the chance of a jackpot that keeps players coming back for more. Critics fault lawmakers for relying on fickle players, conning hapless customers, and ignoring social costs.

Operating lotteries requires a high administrative overhead, and revenues can be volatile. Unlike tax revenue, they depend on constant advertising and can be easily diverted by fickle players who stray into competing states or satisfy their gambling urges at casinos. They also have a reputation for being less reliable than expected—indeed, some states’ profits have been far below estimates.

Despite their claims to benefit education, state lotteries often compound racial and economic inequities. Neighborhoods with lottery retailers have poverty rates three times higher than those without, and Black residents are 25 percentage points more likely to live in them. Moreover, a Howard Center analysis found that state scholarship programs distribute lottery proceeds unevenly, with college students and wealthier school districts receiving more than they need.

State laws generally prohibit winners from revealing their winnings, but critics complain that the rule undermines public confidence in the game and gives the government a perverse incentive to promote it. Almost half of the states allow winners to remain anonymous, and some people argue that anonymity is essential to prevent corrupt officials from pocketing the jackpot. Others say that the privacy concerns outweigh any potential benefits.