Public Policy and the Lottery


Lottery is a popular activity in which people pay to buy tickets that are randomly selected by a machine and have a small chance of winning a prize. People use the word “lottery” to describe any contest in which tokens are distributed or sold, the winners of which depend on luck or fate: The stock market is a lottery. The casting of lots to determine a destiny or a distribution of property has a long history, with many examples in the Bible. The earliest recorded public lotteries were held to raise money for municipal repairs in Rome. Benjamin Franklin sponsored an unsuccessful lottery to fund cannons for Philadelphia during the American Revolution, and George Washington tried a private one to alleviate his crushing debts. Lotteries played a major role in colonial-era America, raising funds for roads, libraries, colleges, canals, and other public works projects.

State officials who establish and oversee a lottery often claim that the proceeds benefit a particular public good, such as education. This argument is especially effective during times of economic stress when states are faced with the prospect of higher taxes or cuts in other public services. In fact, however, studies have shown that the popularity of a lottery is unrelated to a state’s actual fiscal condition. Lotteries also tend to have a broad appeal, even when a state’s budget is in relatively good shape.

The evolution of lottery policy in a given state is a classic example of public policy being made piecemeal and incrementally, with little or no general overview. Typically, a state legislates a lottery for itself; establishes a government agency or a public corporation to run it (as opposed to licensing a private firm in return for a share of profits); begins operations with a modest number of relatively simple games; and, due to constant pressure for additional revenues, progressively expands the lottery’s scope, size, and complexity.

The popularity of the lottery is often attributed to the fact that it offers a quick, low-cost way for individuals to increase their chances of winning a large sum of money. But the truth is that the chances of winning are incredibly slim, and many lottery winners end up bankrupt in a very short period of time. Moreover, the majority of lottery players and revenues are drawn from middle- and lower-income neighborhoods. In addition, critics of the lottery argue that the advertising for many games is deceptive and portrays a misleading picture of the odds of winning and the value of prizes (lottery jackpots are often paid in equal annual installments over 20 years, with inflation and taxes dramatically eroding the current value).