Lottery Funding and Inequity

Historically, lotteries have been used to raise funds for both private and public ventures. For example, the Massachusetts Bay Colony used lotteries to help fund public projects such as canals and bridges in the 1740s. And at the beginning of the Revolutionary War, the Continental Congress established a lottery to fund the colonial army. Alexander Hamilton argued that this was a form of voluntary taxation and that “everybody is willing to hazard a trifling sum for the chance of gaining a considerable sum.”

Despite their long history, lotteries have come under increasing criticism for their inherent inequity. For example, the Howard Center for Public Integrity found that the proceeds from lottery games tend to benefit higher-income people and wealthy school districts that are far from poor neighborhoods where lottery tickets are sold. In essence, lottery money is often used to fund a version of the American dream where low-income communities end up paying for privileged children to go to college, while a handful of people have an opportunity to live large on the backs of the poor.

In the past, state governments have tried to downplay this issue by emphasizing that most of the proceeds from lotteries are used for education and other public programs. This is an important point, but I haven’t seen any evidence that it makes up a significant percentage of overall state revenue. Moreover, the message that lottery commissions seem to be relying on is that even if you lose, you should feel good about playing because you’re doing your civic duty to support the state. I think this is a misguided view that ignores the regressive nature of lotteries and their role in an age of inequality and limited social mobility.