You can’t buy a lottery ticket in Leverett, a tiny town about 10 miles north of Amherst, but the people there still come up winners. Leverett’s town treasury took in $115,090 in lottery-derived local aid last year.

In Quincy, lottery tickets are big business–some $62 million was plunked down in the 1996 fiscal year. Quincy residents shared in the bonanza, too, with the city getting $8.5 million back in local aid from the state lottery. But that’s only 14 percent of the money spent in Quincy, making the South Shore city a big player and small winner.

Which is pretty much how it goes with the peculiar form of state taxation that is the lottery. The state divvies up lottery revenues based not on how much money each town or city produces, but on a complicated state-determined local aid formula. Data provided by the Lottery Commission shows that most of the state’s top lottery spenders–cities and towns where $20 million worth or more of tickets were sold in 1996–are recouping a fraction of the money spent on tickets. (See chart, page 16.)

Of course, the lottery–as a game of chance–is inherently unfair. Most of the money that is generated goes to the lucky few who come up with the right numbers.

In fact, the amount of money that is shared by all citizens, through aid to local government, is quite small. After the Lottery Commission pays for prizes and commissions, only about a fifth of the gross revenue–$642 million in 1996–ends up as local aid.

Where does the rest go?

From July to September of 1996 the commission sold about $744 million worth of tickets and distributed $515 million worth of prizes, documents show. After spending $44 million on operating expenses, and $10.5 million on administrative costs, $175 million remained.

When the Lottery Commission calculates how much is returned to localities, it takes into account the amount given in prizes to local residents and the commissions to ticket vendors–arguing that such money goes back into the local economy.

But regardless of how the local benefit is calculated, it has been on the rise. Lottery revenue reached $3.05 billion in 1996, which helped state aid to localities rise for the fifth consecutive year. Massachusetts municipalities and school districts received $3.48 billion, a 9 percent increase, in state aid this year.

“Lottery money is critically important to cities and towns,” John Robertson, fiscal policy analyst for the Massachusetts Municipal Association, notes. “Not only is it now the only new discretionary aid that cities and towns have received over the past several years, but it is also used to fund schools.”

All in all, the lottery may be the nation’s most popular form of regressive redistribution–for a slim chance at riches, ordinary citizens seem happy to share their meager wealth. Consolation prize: better local services in Leverett.