The Official Lottery – A National Pastime Or a Regressive Tax?

Official lottery is a national pastime, but for poor Americans it’s more like a regressive tax. That’s because they spend more on instant scratch-off tickets and smaller jackpot games than people from higher income groups. In fact, research shows that lower-income Americans spend more on these games every year than they do on gas and groceries combined.

Lotteries are a fixture of American life, but the way they raise money deserves scrutiny. Most states promote their games as a way to save kids, fight crime, or build roads, and people respond by buying tickets in large numbers. But just how meaningful that revenue is in broader state budgets, and whether the trade-off to those who lose money is worth it, remains debatable.

The history of lotteries starts in Europe, where a mix of exigency and Protestant prohibitions against gambling helped them spread from town to town. Soon, settlers in America were using them to fund everything from the construction of churches to civil defense. In time, even Harvard, Yale, and Princeton were partly financed by lotteries—and the Continental Congress tried to use one to help pay for the Revolutionary War.

But critics began to voice concerns about the ethics of funding public services through gambling and, more fundamentally, about the amount of money that states stood to gain from them. They hailed from all walks of life, but they were particularly vociferous among devout Protestants, who viewed government-sanctioned lotteries as morally unconscionable.