The Official Lottery’s Dirty Secret

The official lottery is an immensely popular form of gambling in the United States, with people spending upward of $100 billion on tickets each year. But despite that staggering sum, the vast majority of ticket holders have little chance of hitting a jackpot. In fact, they’re likely to lose more money than the prize is worth. This is the official lottery’s dirty secret, argues Daniel Cohen in a recent article in The New York Times.

In the immediate post-World War II period, when state governments were scrambling to expand their social safety nets without irritating an antitax electorate, lottery games seemed like the perfect solution. They promised to bring in huge amounts of revenue—along with “budgetary miracles” that would allow politicians to maintain state services without resorting to taxes or the dreaded word “tax.”

As Cohen writes, lotteries quickly became, for many legislators and voters alike, the equivalent of “the national dream of instant riches.” These dreams were often reinforced by a relentless advertising assault, which made winning the lottery seem like an inextricable part of American life, from billboards on highways to television commercials that play over music by Kanye West and Rihanna.

But the reality was very different: As the nineteen-seventies and nineteen-eighties unfolded, income inequality widened, job security eroded, pensions shrank, health-care costs skyrocketed, unemployment increased, and the long-held national promise that education and hard work could make anyone richer than their parents began to fade. State lotteries continued to briskly grow, but with their massive prize funds and seemingly easy money came a host of problems.

Lottery opponents questioned both the ethics of government-sanctioned gambling and the amount of money that states really stood to gain. These critics, who hailed from all walks of life and political affiliations, were often devout Protestants who viewed state-sponsored lotteries as morally unconscionable. They were also largely ignored.

Today, lottery winners can hide their identities in a number of ways, including by using an LLC or the name of their church. But that doesn’t stop state officials from publicly announcing the names of winners and making them the subject of endless news stories, a practice that has given lottery opponents an opportunity to argue for a permanent change in the law. New York lawmakers are considering a proposal that would give lottery winners the option of not giving their consent to have their names made public. Whether that will happen remains to be seen. But for now, winners must go through a lengthy process to remain anonymous and pay taxes on their prizes. They must also fill out paperwork and pass a background check in order to win. Msg & data rates may apply.