Official lottery games are run by state governments. They’re very profitable and, in the eyes of their sponsors, good for the economy. They also serve a useful purpose by making the government appear responsible, which is important in an age of distrust of all things government. But there’s a lot more that’s going on behind the scenes with these state-run enterprises. For one thing, they’re doing more harm than good.
A big part of the problem, writes Cohen, is that they’re promoting a skewed version of reality to people who play them. The ad campaigns tell people that they can win great prizes, but the odds of winning are extremely low. As a result, they encourage people to keep playing. This, in turn, creates the perception that lottery revenue is a reliable source of money for states, even though it ends up being only about four percent of total state income.
Then there’s the way that lottery ads target lower-income communities. By focusing on instant scratch-off tickets, they lead poor Americans to believe that winning is an easy way to build wealth. This is, critics say, a regressive strategy that transfers wealth out of poor neighborhoods and hurts social mobility.
Finally, there are the scams that are aimed at lottery winners. These con artists use official-sounding names like the National Sweepstakes Bureau or even the FTC, and they trick people into sending them money or giving away private information, including their Social Security number. It’s a reminder of how dangerous the lottery can be, even for people who only play for small amounts and don’t win anything.
Ultimately, these problems are not the fault of the state lottery commissions. They’re simply a result of the way that state government is structured. Lotteries are very intentionally run as businesses and not subject to oversight from legislators or anyone else who doesn’t have a direct stake in them.
But even if the lotteries were purely businesses, it would be hard to justify them. They are very inefficient; only about 40 percent of each lottery dollar actually goes to the state, and that’s a drop in the bucket overall for actual state budgets, which have long been plagued by rising costs and declining federal revenue. In this environment, it’s tempting for politicians to raise taxes or cut services, but the public doesn’t want either option. So, in response to these pressures, many states have embraced the lottery as a quick and easy source of cash. And while it might help a few lucky people, the lotteries are doing more harm than good. This is why it’s time for a change.