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In the nineteen-sixties, as states faced budget crises exacerbated by soaring population and inflation and an increasingly expensive social safety net, politicians began to turn to lotteries as their answer. Unlike raising taxes, which can be highly unpopular with voters, funding state government through the lottery is a popular alternative. In addition to helping to balance the budget, lotteries generate a good deal of money that can be spent on public projects.
Lottery supporters argue that a lottery is preferable to taxation because the amount of money a person spends on tickets is voluntary. By contrast, a mandatory income or sales tax requires people to pay regardless of their choices. Lottery revenue projections typically assume that a certain percentage of the state’s total population will buy tickets. But as Cohen points out, even a rudimentary analysis shows that, in reality, the number of ticket-buyers fluctuates widely from year to year.
What’s more, state officials are not above manipulating the psychology of addiction to keep lottery ticket buyers coming back for more. They know that super-sized jackpots, which garner a windfall of free publicity on newscasts and websites, drive ticket sales. They also know that dwindling jackpots, which carry over to the next drawing, can keep interest up. This is not much different from the strategies used by video-game companies and cigarette makers.