It’s June 27, and the villagers are gathering in the village square for the town lottery. The town elder, Old Man Warner, is there to open the black box and start drawing. He is wearing a white straw hat, and the villagers all gather around him. It’s a good day for the lottery, and everyone’s happy.
Lotteries are a common source of state revenue in the United States and other countries, raising billions of dollars each year. But they have a dark side that isn’t always seen. Lotteries are a form of hidden tax that can impose large costs on vulnerable populations. And they can promote gambling addiction, which has serious consequences for families and society as a whole. This article argues that lottery revenues should be carefully considered and scrutinized before governments adopt them.
Historically, state government has used lotteries to raise funds for a wide variety of projects. They began in the immediate post-World War II period, when it was possible for states to expand their array of services without imposing onerous taxes on middle-class and working-class people. But as the economy grew, this arrangement shifted to a model in which states relied on the lottery to meet increasing demands for services. The popularity of the lottery has remained high throughout this period, even as public opinion has grown increasingly skeptical about the fairness of hidden taxes.
Many people argue that lotteries are a reasonable way for states to raise money for public projects because they do not represent a significant increase in state taxes. But this argument misses two important points. First, the money that lotteries raise is not a drop in the bucket of state funding, and second, the public does not view the proceeds of the lottery as benefiting any particular public good. State officials and politicians use the argument that lotteries benefit education and other public goods when seeking voter approval, but this claim is misleading because research shows that state lottery proceeds do not actually boost these public services.
Despite this, most states continue to have lotteries. They are popular because they promise a small, speculative gain to some of the people who buy tickets. But the reliance on chance in the lottery undermines the moral foundation of the system, and it obscures the regressivity of the lottery’s benefits. Individual researchers and IRB members who offer lotteries should not be blameworthy, but it is time for the research community to reconsider this practice.