The official lottery is run by each state, but national consortiums of lotteries offer games spanning larger geographical footprints and carrying bigger jackpots. The most famous are Mega Millions and Powerball, which have become de facto national lotteries.
While the lottery’s supporters argue that it is a form of taxation that helps fund public services, economists disagree. In a new book, the historian Jonathan Cohen describes how state lotteries “are regressive and prey on poor people.” He uses cross-sectional time series data to show that lottery proceeds are associated with higher income inequality in states than in those without one.
Cohen and others also show that lottery revenues tend to be more volatile than other state revenue streams. That is because the amount of money that people spend on tickets rises when state income falls, unemployment increases, or poverty rates increase. This volatility is partly why lottery sales are so disproportionately high in neighborhoods that are disproportionately poor, black or Latino.
Despite these flaws, the lottery is still a popular form of gambling in the United States and it is a valuable source of funding for state governments. But it is a bad way to raise money for education, and it can be used to encourage unhealthy behaviors such as gambling addiction. In the end, Cohen argues, it is up to voters to decide whether the lottery deserves our support. Msg & data rates may apply. You must be 18 years or older to play.