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Across the United States, people spent $100 billion on lottery tickets in 2021—making it the nation’s most popular form of gambling. State lotteries are run independently by each jurisdiction but two lottery games—Powerball and Mega Millions—are offered in almost all participating jurisdictions, making them de facto national lotteries.
State lotteries are promoted as a way to raise money for public purposes, and the argument is that while the money might not be a lot in absolute terms, it’s a good use of tax dollars given how much it would otherwise cost state governments. But that argument ignores the fact that state lotteries are a very inefficient way to collect revenue and that they’re actually a drop in the bucket in terms of overall state government revenues.
Lotteries are also a regressive revenue source. They primarily draw on a player base that is disproportionately lower-income, less educated, nonwhite and male. As a result, one in eight Americans buys a ticket at least once a year, but they’re playing for very little. The jackpot prize is directly correlated with ticket sales and it’s often much lower than advertised.
