Lottery Marketing and Low-Income People

The lottery is a form of gambling in which numbers are drawn to determine the winner of a prize. It is popular in some countries, most notably the United States and Canada. People spend billions on lottery tickets each year, even though the odds of winning are extremely slim. This money could be better spent on something else, such as saving for retirement or college tuition. But there is a bigger issue here: the message that lottery marketing sends to poor people.

The drawing of lots to decide ownership or other rights dates back to ancient times. It became a common practice in Europe during the early seventeenth century. The first state-sponsored lotteries were organized to raise funds for towns, wars, and other public uses. In the United States, lotteries have become a very large business. According to the NASPL Web site, there were 186,000 retailers selling lottery tickets in 2003. Generally, retailers receive a percentage of the total sales of lottery tickets sold to customers. These retailers include convenience stores, gas stations, restaurants and bars, nonprofit organizations (such as churches and fraternal organizations), service stations, bowling alleys, and newsstands. Many of these outlets are located in low-income residential neighborhoods.

In the beginning, lotteries won widespread support because they were viewed as a painless form of taxation, especially in times of economic stress when there were concerns about tax increases and cutbacks in public services. However, the success of a lottery depends on the extent to which it can sustain broad and stable popular approval. Studies have shown that the objective fiscal condition of a state does not appear to have much bearing on whether or when a lottery is adopted.

Many states have opted to introduce lotteries in response to the growing demand for a painless way to fund government programs. The lottery is also a popular way to finance capital projects that require significant financial commitments. Moreover, it is an effective tool to attract foreign investment and to encourage the growth of high-tech industries.

Lottery players as a group are disproportionately lower-income, less educated, nonwhite, and male. They also tend to be older than the general population. In fact, one in eight Americans buys a lottery ticket at least once a week. They contribute to the social safety net of their states, and they are a key constituency for lottery marketers.

Lottery advertising aims to appeal to the innate desire for chance and to make people think of themselves as lucky. But it sends a very different message to the poor: it lures them with the promise of instant riches. In this way, the lottery is a reminder of the unequal distribution of wealth and income in America. This inequality is reflected in the lottery’s regressive effects on those who play it. Unless there is a serious reconsideration of how the lottery should be run, it will continue to attract millions of dollars in revenue from people who can least afford it.