Lottery Taxes


The practice of making decisions and determining fates by casting lots dates back to ancient times. Lotteries became popular in the 17th century as a means of raising funds for public uses, and were widely seen as a painless alternative to traditional taxation.

Today, lottery games raise a substantial share of state revenue and are a source of public good in many states. Yet despite the broad popularity of lottery games, few people understand how they operate or how much they are a form of taxation. The reason is that lotteries deliver a dual message: they make money and they’re fun to play. In this way they obscure the regressive nature of gambling and the implicit tax burden that state lotteries impose on consumers.

While lotteries promote themselves as a harmless way for average people to support their state’s public services, they actually benefit a relatively small group of consumers. The majority of players are disproportionately lower-income, less educated, nonwhite and male. In addition, lottery play falls with income and varies by age.

For this reason, lottery players tend to focus on strategies that they believe will increase their chances of winning. These include avoiding numbers that have been drawn recently and selecting the first 31 digits. They also seek out a pattern in the numbering, such as choosing consecutive numbers or those that begin with the same letter. Whether these tactics work is a matter of chance, but they are often based on faulty logic and an ill-founded assumption that the numbers must have some sort of significance.