Winning the lottery is little short of a dream for the vast majority of people. Whilst the number of millionaires and billionaires is seemingly ever-increasing, the reality is that the vast majority of people can never hope to join that list through their normal working life. As a result, the only real chance that most people have to come into a large amount of money is by winning it through something like the Lotto or EuroMillions. This means that the majority of people who play it are those that can ill-afford to spend their money on it, yet do so in the hopes of a big win.
Whilst the National Lottery has a wealth of good causes that it works with, funding the likes of art projects and community centres, the truth is that many people feel that they are the sort of things that the government should be paying for in the first place. Considering the fact that it is mostly the poorest the play the lottery and the chances of winning are so slim, there is certainly a suggestion from many that the lottery is little more than another tax dressed up in the clothes of a prize fund that you’re almost certainly never going to actually be able to win the jackpot of.
The Government Makes Money From The Lottery
The first thing to think about in terms of whether or not the lottery might just be another form of tax is that the government makes a lot of money from the National Lottery. At the time of writing, the government makes about 12% from the lottery every year.
Between April 2021 and March 2021, the lottery generated sales of around £8.1 billion. That means that in the region of £972 million will have been paid in tax, presuming that the 12% figure was stuck to. That is a huge amount of money for the government to bring in on a yearly basis, put towards various things.
Whilst it isn’t as much as other areas that bring in tax, when combined with the rest of the betting industry it is a noteworthy amount. Here is a look at selected forms of tax that the government brought in in 2022-2023:
Form Of Taxation | Amount Raised |
---|---|
Income Tax | £249 billion |
Value Added Tax | £160 billion |
Capital Taxes | £46 billion |
Council Tax | £42 billion |
Gambling Revenue | £3.3 billion |
As you can see, gambling revenue is relatively small fry compared to some other areas that the government makes money in, but it isn’t nothing. Of the £3.3 billion brought in through gambling in 2022-2023, that made courtesy of the lottery is about 29.45%.
In other words, around a third of all money the government makes from gambling comes from the National Lottery, so it is an amount of money that can make a difference over the course of a year. Take just shy of one billion pounds away from any area that receives government funding and you’ll be looking at a fair hit.
Good Causes
One of the main arguments in favour of the lottery is that it is used to fun good causes. Here is a list of things that that National Lottery helped to fund during the early part of 2023:
- Communities celebrating the King’s Coronation
- Refugee Choir in Liverpool
- Funding for Olympic and Paralympic athletes
- Transforming different areas of the United Kingdom
It is difficult to argue against the idea that the government should have been funding all of those causes, with the possible exception of the King’s Coronation. Even then, though, it is the monarchy itself that should’ve been funding that, rather than an independent organisation that takes money from people hoping to win a prize before giving a percentage of it to the government.
Obviously a big part of the argument will depend on what it is that you think taxes should be used to pay for. There will be some small-minded people that despise the idea of money being given to help refugees feel settled and comfortable in their new country, whilst others will feel that athletes should fund their own journeys to events such as the Olympics. Generally speaking, though, most people will feel comfortable with the taxes being used to pay for such things.
Your Chances Of Winning Are Slim
One of the main arguments against the idea of the lottery being the equivalent of a tax is that you can win a prize. When you’re talking about the EuroMillions, your chance of winning any prize whatsoever is around 1 in 13. That seems entirely reasonable, but realistically the prizes that you’re most likely to win are so small that you will barely be able to cover the cost of playing the lottery if you buy a line for every draw each week. With the price at £2.50 per line, two lines a week for 52 weeks would cost £260.
In terms of covering that, you would need to get four numbers plus a Lucky Star, which would bring in an average of £94.43, twice, as well as three numbers and two Lucky Stars. That would see you awarded an average of £241.41, leaving you £20 short. In terms of the odds, the odds of getting four numbers and a Lucky Star are 1 in 31,076, let alone managing it twice, whilst the odds of picking three numbers and two Lucky Stars are 1 in 1 in 14,126. Bear in mind the fact that this is just to cover your out-goings, not to change your life and you can see why many might see it as a tax.
In truth, most people will barely win any prizes, let alone win enough to cover their yearly out-goings. Instead, the money you are spending is essentially just heading straight to the government, via offering the National Lottery’s organisers a profit and contributing to some good causes. Whilst we’re looking at the EuroMillions draw here, other draws are similar, with just the specifics being different. Obviously we all hope to win the lottery and change our lives, but it is much more likely that that is never going to happen and your money is probably better spent elsewhere.