Lotteries have been around for over 100 years, starting in 1890 in Colorado. Today, they are a multibillion dollar business and a major source of revenue for state governments. But are they responsible? Is there any way to ensure responsible lottery play? Is playing the lottery regressive for lower-income citizens? Let’s explore these questions and more. Here are five myths about the lottery. Read on to find out the real facts!
Lotteries are a multibillion-dollar business
State lotteries are a huge money maker, but they also drain resources from low-income neighborhoods. Though lottery revenues go to state schools and other worthy causes, they actually take money from poor neighborhoods, despite their appearance as a voluntary activity. Banning state lotteries isn’t going to make poor neighborhoods rich, but it could help them. The money lost by poor neighborhoods in lottery draws is substantial enough.
They are regressive among lower-income people
Lotteries are regressive, meaning they put more burden on low-income individuals than on higher-income individuals. According to the Fiscal Policy Institute, 4.0% of low-income citizens buy lottery tickets, compared to 0.1 percent of those in the top 10% of the income distribution. That means that lottery money disproportionately falls on the poor, where there is less choice over toilet paper and other basic goods.
They are a source of revenue for state governments
There are many arguments against the existence of state lotteries. They are not voluntary and disproportionately target lower-income families, which raises concerns about transparency, collectability, and revenue raising capability. In addition, few taxpayers benefit from these programs. However, if lottery sales were truly voluntary, the arguments against them are compelling. Here are five arguments against state lotteries that should be considered when evaluating their potential to generate revenue.
They are a source of revenue for retailers
If you want to know how much money lotteries bring in, you’ll find that the state of Washington has more lottery profits than any other state. The state runs lotteries as a way to collect taxes. These funds help fund general public services. If they were not voluntary, they wouldn’t exist. That’s not to say that lottery profits don’t benefit retailers. Nevertheless, they are not economically neutral.