Benefits of Lotteries to State Governments

To some people, state lotteries represent a number of social and economic negatives. Many also criticize the lottery for its virtually impossible odds.  The truth is that the lottery is an effective and time-tested means of revenue generation, especially for state governments.

People as far back as first-century Rome understood the benefit of raising funds for civic and government projects via lottery. The same principles are regularly implemented by state governments today and lottery proceeds often make it possible for various projects to move forward where lack of funding would otherwise leave them at a halt. Different states allocate funds from lottery ticket sales in different ways, many of which revolve around schools, infrastructure or care for the state’s senior citizens.

Lotteries are Taxes

The lottery can accurately be described as a form of taxation driven by consumer demand. The incentive is the chance to win a life-changing amount of money. When an individual doesn’t win, they have paid a voluntary tax to their state or municipality that is allocated for whatever program or programs the state designates. In all fairness, the odds of winning the lottery are incredibly slim, but the incentive of a possible win is a much more positive means of generating revenue than other popular methods like permit fees and traffic citations.

There is a tremendous amount of accountability when it comes to the collection, taxation and allocation of lottery revenues. The states are required to pay Federal tax on these revenues and they are required to show where and how these funds are being used as a matter of public record. This has actually helped fuel arguments both for and against the lottery. For example, many states use lottery revenues to support public schools but many states fall under criticism for the seemingly low amount of funding their schools receive in relation to other programs.

School Funding

The amount of money spent on schools does not, however, indicate whether or not the funds are being used properly. The numbers simply represent the percentages of state budget funds that are allocated to different programs. In many cases, the amount of money spent on schools outweighs the amount of lottery revenue but the percentage of overall monies spent on schools is smaller than those for other programs. This leads to the misguided argument that the money isn’t going where it is intended when, in reality, it is.

Many states also allocate a percentage of lottery revenue to fund other social programs including grants to non-profits and even to support organizations dedicated to curbing compulsive gambling. The lottery is therefore just one of a number of ways for states to collect funds that allows the residents of their state to contribute voluntarily and with an agreeable incentive.

Teachers wanting to explain how lotteries work to ESL students should check out http://www.lessonplanet.com/article/english/how-to-practice-sensitivity-when-teaching-about-the-lottery.

Leave a Reply

Your email address will not be published. Required fields are marked *