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Debate: National lotteries

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Should national lotteries be abolished?

Background and context

Many countries have lotteries in order to raise revenues for various levels of government. These are usually monopolies granted by the government to private companies who take a slice of the profits and turn the rest over to the state. Income from state lotteries is often devoted to special categories of spending, partly in order to make playing the game more attractive to the public; in the USA states often use lottery funds for education, in Britain they are pledged to areas such as sport, the arts and charities. Most lotteries involve tickets purchased from local vendors, these may be pre-printed with digits or carry a selection of numbers chosen by the purchaser. Draws are usually made on national television, either weekly (the UK and Australia) or less often (Spain, some US states), in which case huge attention surrounds the event. Debates on lotteries are usually better if they focus on the principles involved, rather than the detail of how a particular national lottery is run and regulated.

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Argument #1

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Yes

It is wrong for governments to take advantage of their citizens by encouraging them to play a lottery. The chances of winning significant money are so small (1 in nearly 15 million in the UK) that only the ignorant, gullible or desperate will play. To use this as a means of raising public revenues amounts to a tax on stupidity.

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No

If nobody ever won the lottery, then nobody would play it. The public appreciates that the odds against them are very high indeed, but the purchase of a ticket gives them a chance of a fortune, however remote, and the opportunity to dream of a different life. As other forms of gambling are legal, along with many other ways of harmlessly but enjoyably wasting money, there is nothing wrong with the government benefiting from the pursuit.

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Argument #2

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Yes

Lotteries are in effect a regressive form of taxation, played much more by the poorer members of society than by the rich. It would be far fairer if the revenues raised by a lottery were obtained through general taxation, e.g. income tax, which is much more progressive. This argument becomes even more important if the proceeds of a lottery are spent on things which fail to benefit the poor - the millions received from Britain’s National Lottery by the Royal Opera House represent a considerable redistribution of wealth from the poor to the rich.

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No

Playing the lottery is a free choice and is by no means confined to the poorest. The issue of regression relates more strongly to what the revenues from a lottery are spent on (although it is patronising to assume that only the rich can enjoy opera, for example), rather than on the principle of a lottery. In many countries the general taxation system is far from progressive in any case, with an increasing share of government revenue coming from indirect taxes such as fuel duties and sales taxes, rather than from income or property taxes.

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Argument #3

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Yes

Gambling is a major social evil, an addictive habit that ruins thousands of lives and damages families every year. A national lottery not only provides another easy opportunity for gambling, but also removes the stigma from all forms of gambling and acts as a gateway for potential addicts to become hooked on more expensive and ruinous forms. Governments should be in the business of harm-reduction, not legitimising such destructive activities.

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No

A lottery is significantly different, and thus much less harmfully addictive, compared to other forms of gambling. This is largely because the chance of winning a lottery is so small that there can be none of the regular small gains which convince the habitual gambler that they are on a winning streak, and so reinforce the addiction. Ultimately, very few of the people who play lotteries are addicted to gambling or will become so; should something enjoyed by so many be abolished because a few abuse it?

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Argument #4

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Yes

A national lottery, run with government backing amid huge publicity for attractive good causes, creates economic distortions. Other forms of gambling may suffer as a result, leading to unemployment and reducing the revenues available to run such popular sports as football and horseracing.

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No

Overall, national lotteries tend to increase the size of the market for gambling, and so create more jobs than they destroy, although some disruption in the industry is inevitable. In particular, sales of lottery tickets can be a major part of the business of small shops and post offices, ensuring that they stay in business and continue to serve their local communities, especially in remote or deprived areas.

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Argument #5

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Yes

National lotteries also distort charitable giving, as many people justify their purchase of tickets as a form of donation, often over-estimating the proportion of the ticket price that actually goes to good causes. One result of this is that direct charitable giving may decline significantly. And even if the lottery board gives some of its revenues to charities, these may not be the same as those which lost out when the lottery was created - for example, a lottery board is more likely for political reasons to favour domestic and secular charities over international or religious foundations.

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No

The pattern of charitable giving may change as a result of a lottery, but fashions in benevolence change considerably from year to year in any case, so the disruptive impact should not be exaggerated. Overall, lotteries tend to result in more money overall going to charities, while the major international charities increasingly act as channels for developed governments’ aid funding to developing countries, and so rely less on individual donations. Lottery funding may be made conditional on matching money being raised privately, giving greater publicity and momentum to charity fund-raising campaigns.

See also

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