State Lotteries Are Regressive, Deceptively Marketed Gambling That Shouldn't Be Exempt from Scrutiny
Source: "Powerball and Mega Millions may offer some of the worst bets in America | Fox News." September 25, 2026. www.foxnews.com
The Gist
The author argues that while everyone's worried about new betting apps like Kalshi and sports gambling, the real bad bet hiding in plain sight is the government lottery. Poor and middle-class people spend real money chasing near-impossible odds, and calling it 'funding education' doesn't make it less harmful—it's still the government profiting off citizens' terrible odds of getting rich.
Conclusion
Government-run lotteries like Powerball and Mega Millions are among the worst bets in America and deserve the same moral and regulatory scrutiny as prediction markets and sports betting, rather than being shielded because their proceeds fund public programs.
Premises
- The odds of winning Powerball (1 in 292.2 million) or Mega Millions (1 in 290.5 million) jackpots are astronomically low, making them mathematically terrible bets.
- Lotteries have escalated ticket prices (from $2 to $5) and introduced $10-$50 scratch-offs, extracting more money per bet from players.
- Lottery spending disproportionately harms lower-income households, for whom $20/week ($1,000+/year) represents a significant percentage of income that could otherwise build wealth (e.g., $113,000 over 30 years if invested at 8%).
- Economists have long characterized lotteries as regressive taxation because the burden falls disproportionately on the poor relative to income.
- Lotteries are marketed as funding good causes (education, veterans, seniors) which gives them a moral pass that other forms of gambling, like prediction markets, do not receive, despite lotteries offering worse odds and no skill-based element.
- Unlike prediction markets, which can be informed by research, polling, or earnings data, lottery outcomes are pure chance with no informational edge available to participants.
- Despite funding $30.6 billion in public programs, this doesn't change the fundamental nature of the transaction: government selling citizens extremely long odds of wealth.
Assumptions
- Regressive taxation (via voluntary purchase) is morally comparable to or worse than other forms of gambling currently under scrutiny.
- The primary metric for evaluating whether a bet is 'bad' should be its expected financial return rather than entertainment value.
- Consumers who buy lottery tickets have some capacity to instead save or invest that money productively.
- Public funding derived from lottery proceeds does not morally offset the individual financial harm to lower-income purchasers.
- Government should be held to the same standard as private gambling operations rather than being given special consideration for its dual regulator/operator role.