How Lottery Revenue Varys by Income and Other Factors


A lottery is a form of gambling where participants pay a small amount of money in order to have the chance of winning a large sum of money. Lotteries are often run by state or federal governments, and they are considered a very popular way to raise funds for a variety of different projects. In addition, lotteries are a very attractive revenue source for states and other governments because they do not require the payment of taxes or any type of other public funds.

Although the practice of making decisions and determining fates by the casting of lots has a long history (and several examples in the Bible), the modern lottery is very much a recent development, with the first recorded public lotteries held in the Low Countries in the 15th century to raise money for town fortifications and for helping the poor. Francis I of France was the first European monarch to approve a public lottery for private and public profit in 1500, and this began the spread of public lotteries across Europe.

In the US, people spent over $100 billion on lottery tickets in 2021. While lottery proceeds are a significant source of state revenues, they are far from being enough to offset reductions in other government spending and to meaningfully boost education and social welfare programs. Moreover, there are serious concerns about the impact of lotteries on socioeconomic disparity.

For these reasons, it is important to understand the way that lottery revenue varies by income and other factors. The following charts compare the percentage of lottery players by income and other characteristics, including age and sex. The results show that lottery play is higher among lower-income individuals and that it declines with educational attainment. These trends are consistent with the broader pattern in gambling, where higher-income individuals and those who have more formal education play less than other groups.

The chart on the right shows the distribution of applications received by the New York State Lottery in a random drawing. Each row represents an application, and the columns represent the position of each application in the drawing, from the first position on the left to one hundredth position on the right. The color of each column indicates the number of times that each application was awarded that position in the drawing. The fact that the distributions match up so well suggests that the lottery is unbiased, and it is unlikely that any one application would win more frequently than others.

State officials have long promoted lotteries as a painless source of revenue, and that is the message that many citizens hear. But research has shown that the popularity of lotteries does not correlate with a state’s actual fiscal condition, and it is unlikely that these revenues will ever be sufficient to offset reductions in other government spending or to boost educational funding. In the end, the lottery is just another form of gambling and should be subject to the same scrutiny as any other form of taxation.

Theme: Overlay by Kaira Extra Text
Cape Town, South Africa