The Lottery – A Deceptive Way For Governments to Skim Taxes


Lottery is a gambling game or method of raising money, as for some public charitable purpose, in which a large number of tickets are sold and a drawing is held for a prize. It is often viewed as an alternative to higher taxes, but it has also been criticized for being a deceptive way for governments to skirt taxation and for regressively affecting poorer citizens.

The casting of lots to make decisions and determine fates has a long record in human history, including several instances in the Bible. The lottery as a way of allocating property and even slaves was practiced in ancient Egypt, Babylonia, and Rome. Lotteries became more popular in the eighteenth and nineteenth centuries as states established banking and taxation systems and sought ways to quickly raise funds for a variety of projects. Even famous American leaders like Thomas Jefferson and Benjamin Franklin used them. Jefferson organized a lottery to retire his debts and Franklin sponsored one to buy cannons for Philadelphia.

State lotteries are highly profitable enterprises. In 2002, thirty-nine states and the District of Columbia reaped more than $42 billion in revenues—more than double the amount reported just seven years earlier. These profits are used for everything from education to public works to social welfare programs. State officials argue that the lottery is a painless source of revenue and an effective alternative to increasing taxes. Opponents say that the odds of winning are so low that the lottery essentially skirts taxation and leaves the state in the role of con artist.

Because lotteries are run as businesses with a clear focus on maximizing revenues, their advertising necessarily emphasizes the possibility of a big win. This message has a powerful impact on the public, especially on those who are most vulnerable. Many of those who play the lottery are low-income residents. As a result, their participation in the lottery is disproportionately lower than in high-income neighborhoods.

To counter this, state lotteries use two messages primarily: that the games are fun and that playing them is an inexpensive activity that can produce a significant reward. These messages may obscure the fact that the chances of winning are slim and that people who participate in the lottery spend a disproportionate amount of their incomes on tickets. Moreover, they can reinforce the irrational gambling behavior of those who are most addicted to the game. These people have quote-unquote “systems” for selecting numbers, determining which stores to shop at, and timing their purchases of tickets. They believe these strategies can help them overcome the odds and turn a small investment into a huge fortune. In this sense, the lottery can become a way of life for these individuals. It is important to note that the odds of winning are extremely slim, but there is always a chance. That is why it’s important to always play within your budget and never exceed it. Otherwise, you might end up in trouble if you aren’t careful.

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