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Throughout the centuries, people have gambled to win money, from the Low Countries in the fifteenth century onward, to fund town fortifications and provide charity for the poor. Eventually, the practice spread to England, and in 1567 Queen Elizabeth I chartered the nation’s first lottery. Her charter made it clear that lottery profits would go to the defense of the realm and a general fund for the welfare of the subjects.
Lottery proponents insisted that the games could fill state coffers and sate the thirst for public works without raising taxes. In a country defined politically by an aversion to taxation, it seemed like the ideal solution to what was by then becoming an annual budget crisis. But this was a pipe dream. Lottery proceeds were far less than envisioned, and in the first years of operation they covered only about one per cent of a state’s total spending.
In addition, a large share of lottery revenue comes from poorer states and regions, where the average income is lower than in richer ones. These states are also more likely to have trouble passing a balanced budget in the first place. The combination of declining prosperity, a growing population and an expanding social safety net has made it more difficult than ever to balance state finances. Balancing the books has required cutting services or raising taxes, both of which are unpopular with voters.
Consequently, states that have been desperate for new sources of revenue have turned to lotteries. But Cohen argues that lotteries are, in the long run, no different than other forms of gambling: they prey on the poor. They breed short-lived excitement, then despair. They drain scarce resources that might be put to better use, and they may erode confidence in the ability of individuals to succeed.
Lottery advertising is aimed at creating a sense of urgency and hope, but it is ultimately misleading, he writes. The reality is that lottery games make it difficult to balance a state’s budget while continuing to pay out prizes, and that’s not the best way to help the poor. Instead, he argues, the government should work to increase incomes. That could mean cutting tax rates, increasing the minimum wage or raising the eligibility age for welfare benefits. It would also require the creation of a national health care system and universal education funding. It would also reduce the number of people in poverty. But that’s a big task, and it would take political will. *Not available on all devices. You must be a Pennsylvania Lottery player to use the official mobile lottery app. Download the free app by entering your phone number or texting APP to 66835.