Social critics revile lotteries as state-sponsored regressive taxation because people buy lottery tickets disproportionately to their incomes–it’s a tax on the poor, in other words. The NASPL disputes that characterization, but research by economist Melissa Kearney at the University of Maryland shows that when state lotteries are introduced, they suck up 2.5% of household expenditures that would otherwise go to food, rent and things like children; the spending level reaches 3.1% when instant games enter the picture. But Kearney is not a lotto scold; she now sees lotteries as perfectly rational outlays, subject to the controls that would be imposed on vices like alcohol. “For the majority of lottery players, they are getting a bit of entertainment or consumption value,” she says. “Simply the fact that it isn’t a positive return doesn’t mean it’s an irrational choice….”
For the cash-constrained, says Kearney, “there is not another asset available to them to be life-changing. They have some chance that they are going to win a million bucks. So it becomes not a terrible proposition.”