State Lotteries

The premise of state-run lottery games was that they would raise extra revenues for government services. But this promise didn’t match up with reality: Instead of a substantial revenue boost, lottery profits often displace other state revenues.

Critics questioned the ethics of using gambling to fund public services, arguing that such a practice would shift the funding burden on low-income people. They also complained that lottery players were prey to predatory gambling companies and were more likely than their non-gambling counterparts to engage in crime.

Proponents of state-run lotteries argued that the revenue raised would provide a much-needed influx of tax dollars for education — K-12, college or both. But a new investigation by the Howard Center shows that this promise hasn’t been fulfilled in the long run.

Even as states expanded their lotteries and increased their payouts, the game became more regressive, encouraging low-income play and promoting compulsive gambling habits. And, as a 2004 study by three Cornell economists found, states that heavily promote gambling have higher poverty rates than those that don’t. These findings are a serious problem, especially given that lottery profits are typically spent on services and programs that aren’t primarily targeted to the poor. In addition, gambling is a major source of addiction. Many state governments have tried to curb this scourge with hotlines and programs, but few have succeeded. Ultimately, the best way to tackle the issue of gambling addiction is through regulation and oversight.