Does the Lottery Make Sense As a Taxation?

The lottery is a fixture in American society; Americans spent upward of $100 billion on tickets last year. It’s also a popular way for states to raise money, but does this make sense? If the lottery were a charity, this might be appropriate; but as a form of taxation it is at odds with public policy. Lotteries promote themselves as a “fair” form of gambling that doesn’t hurt poor people or problem gamblers, but the truth is far different. They’re run as businesses with a clear focus on maximizing revenue, and advertising deliberately tries to persuade targeted groups to spend their hard-earned dollars. But does this at cross-purposes with the broader state budget and, even more importantly, is it really in the best interests of the people playing the games?

Lottery advertising is not just misleading, it’s often deceptive. It commonly presents information about the chances of winning that is not accurate, inflates the value of the prize (which is paid in an annuity over three decades, with inflation dramatically eroding the current value), and encourages irrational gambling behavior such as buying multiple tickets or purchasing tickets from “lucky” stores or numbers. And it’s not just the ads that are troublesome; the actual lottery is an expensive operation to run, and a significant portion of the prize money is used for overhead costs and prizes to the winners.

The word lottery derives from the Dutch noun lot meaning fate or fortune, and it is indeed a game of chance. In its earliest forms, it involved the casting of lots to determine fortunes, and the earliest recorded state-sponsored lottery was in 1466 in Bruges, Belgium. It wasn’t until the 17th century, however, that it became widely accepted in Europe as a painless form of taxation.

Despite the hype about the possibility of winning, the odds are not in your favor. Unless you are a genius mathematician, it is almost impossible to beat the odds of the jackpot. The numbers are picked randomly, and no matter how many combinations of numbers you choose, the odds are still against you. The only way to increase your odds is by forming a group to purchase all of the possible numbers.

Having said that, there are some strategies that might improve your chances of winning, such as selecting numbers that end in the same digits or avoiding those that begin with the same letter. But even this is not guaranteed to increase your odds. Regardless, the most important thing is to play regularly, and remember that the lottery is just a game of chance. It is not a cure for financial woes, and it is not the only way to get rich. It is a good idea to set aside a small percentage of your income for the lottery each month and enjoy the opportunity to win. Just be sure to read the fine print before you buy a ticket! Good luck! Article by John L. Scott, a Seattle attorney and blogger who writes about law and ethics at the Legal Intelligencer.