Lottery Revenues Are Regressive


A lottery is a form of gambling in which people pay to play for the chance to win money or goods. State lotteries bring in billions of dollars each year. But there are big trade-offs when it comes to how that money is spent.

One big trade-off is that lottery revenues are regressive. The poor spend far more on lottery tickets than the rich, and their purchases are a much larger proportion of their incomes. The average person in the bottom quintile spends more than a third of their discretionary spending on tickets, while the average person in the top quintile spends only about two percent.

Lottery marketers understand this well, and they rely on two messages primarily. One is that playing the lottery is fun, and the other is that it’s a way to help the kids. The problem is that both of these messages obscure how regressive the lottery is.

The fact is that winning the lottery is a long shot, but irrational gamblers don’t let facts get in the way of their dreams. They buy tickets for the big jackpots and buy combinations of numbers based on their birthdays or other significant dates, even though this is a path well-trodden by most players and decreases their chances of avoiding a shared prize. The truth is that there’s no such thing as a lucky number, and the odds of winning are roughly the same for every set of numbers.