The official lottery is a state-sanctioned business that sells tickets for a chance to win a prize. The money raised is used for public services, such as education, health care, and social welfare. In the past, lotteries were a way for states to raise revenue without raising taxes. Cohen argues that in the immediate post-World War II period, politicians saw lotteries as “budgetary miracles,” a way to maintain services without raising taxes, which would have been unpopular with voters.
Historically, there has been much debate about whether or not the lottery is a tax. In Canada, for example, buying a ticket on the Irish Sweepstakes was illegal until 1967 when the federal Liberal government introduced a special law (an Omnibus Bill) intended to bring up-to-date a number of obsolete laws. The Minister of Justice argued that the bill contravened the Criminal Code while Montreal’s mayor insisted that it did not.
Although the lottery is a form of gambling, its supporters often present it as a kind of voluntary tax on stupidity, arguing that players don’t understand how unlikely they are to win and that they enjoy the experience of playing. But this argument obscures the fact that people spend a large percentage of their incomes on lottery tickets, and that lotteries are responsive to economic fluctuation. For example, sales increase as incomes fall and unemployment rises. In addition, lottery advertising is often disproportionately concentrated in low-income, black, or Latino neighborhoods.