Does the National Lottery exploit the poor?

The modern incarnation of the National Lottery held its first draw in 1994. Over the fifteen years of its existence it has raised £21 billion for arts, heritage, charity and cultural causes, including a recent £2.2 billion grant for the 2012 Olympics.

On one level, this is great, a vast pot of cash for public works. On the other hand, what if the people contributing the most to it are getting the least back?

A study by the Theos think tank has analysed who plays the lottery. Around 57% of adults actively play, but those with lower incomes are more likely to play regularly. A Comres survey found that 36% of households earning £15-20,000 a year bought scratchcards once a month or more, compared to a 14% average. Those with A Levels or lower were also more likely to play than those with higher qualifications, and poorer households spend a larger percentage of their income on the lottery than richer households.

This might be alright, if those participating in the lottery also reaped the benefits. Unfortunately, the evidence suggests that the poorest sections of society are no more likely to gain access to lottery funding. On average, each of us should have benefited from around £34 worth of arts spending from the lottery, but if you live in London you will have received £50-£90 worth. Non-whites also receive less per capita. There are similar findings for heritage and sport spending. Poorer areas don’t always receive less in absolute terms, but they do receive less proportionally, because they contributed more to the fund in the first place.

The complexity of the the funding applications makes things worse. It is a difficult and drawn out process, so it ends up favouring more professional organisations, and delivers more money to middle class concerns.

“The good cause funding created by Lottery play is disproportionately drawn from the less affluent,” concludes the report, “yet it is not spent for their benefit.” If this is true, the lottery is socially regressive, compounding inequality.

As a government report states, “Levels of play among low income groups have led to claims, in both the United Kingdom and the United States, that the Lottery has a regressive impact. That view was also stated anecdotally by retailers, who said that some players consider the Lottery to be ‘a tax on the poor for the patronage of the rich.’”

This doesn’t mean we need to ban the lottery. Nobody is forced to play, and it does raise significant funds. But, as we’ve seen recently, inequalities in society matter, and anything that makes inequality worse is bad for society. The lottery license is up for review soon. It would be a good opportunity to adjust the funding mechanisms of the lottery, so that whose need is greatest receive the most assistance.