Did you buy a Mega Millions lottery ticket last week? Untold numbers of Americans jumped on the bandwagon, swelling the total spent on this lottery across the United States to a record high $1.5 billion. The three winners will split a prize of about $650 million in net present value.
While I marveled at the phenomena, I was left wondering: Where does the rest of the money go?
Vice serves virtue—that’s the message of the public lottery, though I’ve paraphrased a bit here. The virtue, of course, is education. Public gambling has been sold as a way to rescue public education, providing the funds we need to educate our nation’s children. But is it true?
It turns out the lotteries clearly display their contributions to education. Here, for example, is the Michigan Lottery’s story of where the money goes: 58 cents of every dollar goes to the prize winners, 30 cents goes to schools, 7 cents pays commissions to the retailers, and 5 cents covers advertising, administration, and other expenses. Since 1972, the Michigan Lottery paid $16 billion to public education.
All told, the lottery covers about 6.6 percent of the public education budget. To put that in perspective, that’s about the same contribution to education as the Michigan business tax makes and twice the amount that comes from the tobacco tax. The big money, however, comes from the state sales tax, which contributes 42.5% of the education budget. The state property tax (16.7%) and income tax earmarking (17.7%) are the other big sources. These figures are comparable to other state lotteries, though some critics claim the net contributions to education are much smaller.
So, while the lottery helps, it can’t rescue education. And, it can harm education. It can harm education when state legislators don’t treat lottery contributions as additional revenue, but instead cut state contributions to education and count on the lottery to make up for it. This is one of the criticisms of the California State Lottery, for example.
The bigger question is the principle itself: vice funding virtue.
Do you participate in a lottery?
What do you think of lottery contributions to education?
Is there a moral issue in promoting lotteries?
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Originally published at www.OurValues.org, an online experiment in civil dialogue.