What’s Happening Behind the Scenes of the US Lottery?
The lottery is a fixture in our national life, drawing billions of dollars in play each week. Some play for pure entertainment, but others have a deeper motivation: to change their lives. Whether it’s winning the Powerball jackpot or simply having the right numbers at the right time, lottery players have been able to rewrite their personal stories. But while the lottery is a popular source of revenue, its costs and the impact on people’s financial well-being deserve a closer look.
In the US, 44 states now run lotteries. The six that don’t—Alabama, Utah, Hawaii, Mississippi, Nevada and Mississippi—don’t have the kind of social safety nets or budgetary pressures that would likely drive their legislatures to approve state-sponsored gambling. In those cases, the decision not to participate may be based on religious beliefs or, as in the case of Mississippi and Nevada, on the fact that they already get their share of gambling revenues from existing casino-like gaming.
But even in states where the lottery is legal, the underlying economics are troubling. As the Pew Charitable Trusts explains, about 70 to 80 percent of all state-sponsored lottery sales come from just 10 percent of players. This is a concentrated group that’s disproportionately low-income, less educated and nonwhite. It’s also a group that spends more on the lottery than on any other form of gambling.
Lottery commissions are keenly aware of this. That’s why they have shifted their messaging away from an unapologetic appeal to gamblers’ irrationality. Instead, they promote a message that suggests there are good ways to play the lottery, ways that don’t involve spending $50 or $100 a week on tickets. This is a subtle but significant shift.
A growing number of lottery players are aware of the odds against them and still play. They know that their chances of hitting the jackpot are slim, but they still believe that there is a way to improve their odds. This is why many play multiple lotteries and invest in strategies such as buying large quantities of tickets, playing certain numbers that are close together, or purchasing tickets from a trusted source like a reputable online lottery agent.
But what’s happening behind the scenes is troubling, too. Lottery winners, when they are successful, often use their fortunes to finance all sorts of things: dream homes, luxury cars, globetrotting vacations with their spouses. A recent HuffPost story described how a retired couple in Michigan made $27 million over nine years by buying thousands of tickets at a time and using a strategy they figured out on their own.
The couple’s story illustrates how lottery winners can use their success to make the world a better place, but it also suggests that this isn’t an activity that should be promoted as a path to economic security and wealth for all. It’s an activity that, at best, is a form of recreational gambling that shouldn’t be supported by taxpayer funds.