Lottery Gambling and State Budgets

Lottery gambling is a popular and profitable form of state-sanctioned, government-regulated entertainment. In 2021 alone, American consumers spent more than $100 billion on lottery tickets, making the game one of the most popular forms of gambling in the world. But just how much people enjoy this activity and what does it really mean for states that rely on it to fund services like education?

In this article, we use a combined sample from two national U.S. household surveys to focus on detailed sociodemographic predictors of lottery play. We find that, in addition to the usual suspects (such as ages, gender, and SES), those who lived in areas with high neighborhood disadvantage were more likely to gamble on the lottery than those living in more advantaged neighborhoods. Moreover, this effect was stronger among youths than adults. This finding suggests that the association between lower SES and minority race/ethnicity and neighborhood disadvantage is not simply due to a lack of access to other forms of gambling, such as card games or office pools.

Throughout history, governments have relied on lotteries to raise revenue for many purposes. But critics have long questioned both the ethics of state-sponsored gambling and the amount of money that actually goes toward the services that lotteries claim to fund. Even today, state governments that rely on lottery revenues struggle to balance budgets in an era of anti-tax sentiment. Consequently, they are constantly looking for ways to increase lottery sales.