As we approach the centennial of the US lottery, we’re reminded that the system is rigged.
In a post-election article for the American Conservative, economist and columnist William Kristol argued that the US government is now paying the “tribute” to the lottery’s “lucky winners” by keeping the number of people winning tickets at a historically high level.
“The big winners of the lottery are the winners of state lottery tickets, which account for about 40 percent of the nation’s revenue,” Kristol wrote.
“We have a huge surplus to use, but the federal government has been cutting back on the amount of lottery tickets we give away.
So it’s not just the lottery ticket winners who are paying the tab.”
Kristol noted that, since the lottery was legalized in 1924, “the average amount Americans have paid to the federal treasury is $1.4 billion per year, while the amount spent by the states on state lottery revenue has dropped by more than $2 billion.”
“That’s about a quarter of what we’re supposed to be paying for every year.”
The conservative economist argues that the increased spending on state and local governments is part of a “loser’s tax” designed to ensure that winners of lottery prizes “are still getting to keep the cash.”
“If the federal subsidy were to stop, it would have to be balanced by a reduction in the amount we’re giving to state and municipal governments, a reduction of the amount they spend on lottery tickets that were originally given away free to everyone, and an increase in the money they make off the tickets,” he wrote.
The government’s fiscal strategy for this year’s lottery has also been criticized.
Kristol points to an August study by the American Enterprise Institute that found that, while states are already getting “more than half of the federal funds that would be needed to make the state lottery system work” this year, the federal share of that total “is projected to be just $1 billion.”
The Heritage Foundation has also noted that the government’s proposed budget for 2019 “has a budget for the lottery that is nearly $7 billion less than the amount that the states spend on state gambling each year.”
According to Kristol, this would likely have a “severe impact on state government budgets.”