Lottery History
In recent times, lotteries were outlawed by states until New Hampshire established its state lottery in 1964. Today, 43 states plus the District of Columbia operate lotteries and offer five main types of “products”: instant scratch tickets; video lottery terminals (a benign label for what are essentially slot machines and video poker machines); electronic terminals for Keno (also called Quick Draw); daily numbers games; and lotto games like Powerball and MegaMillions. And in 2011, state lotteries are now aggressively plotting to add a sixth form of gambling to their arsenal: intrastate internet gambling.
“The states now offering lotteries do not simply make a product available in order to accommodate the widespread taste for buying a low-priced chance at a big prize…they seek to foster that taste,” wrote Charles Clotfelter and Philip Cook in their book Selling Hope.
This massive expansion of state lotteries has had severe consequences for tens of millions of Americans, including the emergence of a Lottery Class in which more than one out of five citizens believe the best way to secure their financial future is to play the lottery according to the Consumer Federation of America.
Lotteries Place Disproportionate Tax Burden on the Poor
In this Reuters opinion piece, David Cay Johnston examines the shift in how in 11 states, lotteries, the most heavily taxed consumer product in America, generate more revenue than state corporate income taxes. Johnston also raises the interesting point that the increasing trend toward easy reliance on lotteries has not translated to increased revenue for states.
U.S. Lotteries and the State Taxman