( CNN ) -- Friday morning , many Americans lined up outside their local convenience stores , hoping to pick the lucky numbers that would win the record-setting $ 640 million jackpot offered by Mega Millions . The curious thing about this fervor is not that the odds of winning are 1 in 176 million , but rather that in effect , Americans are anxiously lining up to pay a tax , even if it is wrapped in attractive clothing . While no government actually labels its lottery a tax , the games properly fit the definition of one . After lottery winnings are paid out and administrative costs have been covered , the leftover money is transferred into state coffers to pay for state programs . This is a tax . State governments have developed a strong reliance on these lottery `` profits '' over the years . In 2010 , states collected an average of $ 58 per capita in implicit tax revenue from their lottery programs . Delaware , which had the heaviest reliance on lottery revenue , collected a stunning $ 370 per capita . This increasing reliance on lotteries to fund state governments is troubling , as these taxes disproportionately fall on low-income individuals . A slew of studies in the past two decades has found that low-income people spend a greater portion of their income on lottery tickets than do high-income individuals , meaning lotteries are a regressive way to collect tax revenue . Many have argued that while lotteries are indeed taxes , they are not so bad , because people pay them voluntarily . But people only buy government lottery tickets voluntarily because private lotteries are not allowed to operate . State lotteries only pay out an average of 60 % of their gross revenues , a payout vastly inferior to those of slot machines and table games , which offer payouts in many cases above 90 % . People only buy state-run lottery tickets because tickets with better odds are choked out of the market . So while the purchase of the ticket itself is voluntary , the portion of that ticket sale that goes to state revenues is not , much in the same way that a sales tax paid on a book is not voluntarily paid . The curious relationship between state-run lotteries and taxes does not end there though . Even when someone wins the lottery , the winnings are subject to special withholding taxes at the state and federal levels . If someone wins the $ 640 million jackpot , they would be immediately subject to a 25 % federal withholding and state withholding rates as high as 12 % . Their total income tax burden on the winnings might be more depending on how they invest that income and what credits and deductions they take next April . The opinions expressed in this commentary are solely those of Scott Drenkard .
The Mega Millions lottery jackpot is at an estimated $ 640 million . Score: 6 Lotteries take a disproportionate share of income from the poorest Americans , he says . Drenkard says lotteries pay out a lower share of revenues than other forms of gambling .