Lottery – Is it a Tax on the Less Affluent?
Lottery is a form of gambling in which players pay money to enter a drawing in which they hope to win a prize. The prizes are usually cash or goods. Most states operate state lotteries. There are also private lotteries in which winners can choose from a variety of items such as automobiles or vacations.
Many critics claim that lotteries are a hidden tax on those least able to afford it. Studies show that people with lower incomes participate in the lottery at disproportionately higher rates than their percentage of the population. This is a result of a number of factors including the fact that people who play the lottery tend to be younger and have less disposable income. Lotteries also attract women and people of color more than whites.
One argument for a state lottery is that it is a painless source of revenue. This view posits that voters want states to spend more and politicians look for ways to raise taxes without the sting of a general public tax increase. It also assumes that gambling is inevitable and the state might as well make money from it.
State lotteries have evolved in almost every state since New Hampshire first introduced them in 1964. The evolution has been a classic case of public policy being made in piecemeal fashion with little overall oversight or control. As a result, the policies that are put in place have broad constituencies, including convenience store owners (who are often lottery vendors); suppliers of lottery products and services (who donate heavily to political campaigns); teachers (in those states where some lottery revenues are earmarked for education); state legislators (who quickly become accustomed to extra funding); and the general public at large.