Lottery is a fixture of American life: people spend upwards of $100 billion on tickets each year, and governments promote them as ways to raise money without raising taxes. But just how significant those revenues are, and how much they come at the expense of compulsive gamblers, low-income families, and other people who get duped into believing that there’s a chance to become rich, deserve some scrutiny.
The lottery is a popular way for states to raise money by selling tickets with numbers that match randomly selected numbers drawn by machines. The prizes range from relatively small amounts to large jackpots. The prize pool is the sum total of all the ticket sales (minus profits for the promoter and other costs) and taxes or other revenues. The word “lottery” comes from the Dutch noun lot, meaning ‘fate,’ but it is often used to refer specifically to state-sponsored games of chance.
Across the country, the lottery is a source of controversy. Its critics argue that it is a form of gambling that is harmful to society, particularly poor and vulnerable people; its supporters counter that it provides a needed revenue stream and alleviates the pressure on state budgets from increasingly onerous taxes. But perhaps the real question is whether or not a state government should be running a lottery at all.
In most cases, the establishment of a state lottery follows similar steps: the government legislates a monopoly for itself; establishes a public corporation or agency to run it (as opposed to licensing a private company in return for a share of the proceeds); begins operations with a modest number of relatively simple games; and then, in response to pressure for additional revenues, progressively expands its offerings, especially in the form of new games. The ongoing evolution of lottery policy is a classic example of the fragmented nature of state governance: authority over the industry is divided between executive and legislative branches, and the resulting oligopoly tends to ignore the broader public interest.
There are certainly good reasons to fund the lottery: it can generate substantial amounts of revenue for public services, and it can help subsidize programs that would otherwise be largely dependent on the generosity of individual donors. But the evidence suggests that the popularity of a lottery is not related to its impact on state government’s actual financial health: state lotteries have gained broad support even in times of relative economic stability.
And despite the rhetoric about everyone playing, the reality is that lottery players are a remarkably polarized group. The largest group consists of low-income and less educated people, who are also more likely to be men; the numbers drop as incomes increase. Moreover, people who play the lottery are disproportionately likely to be compulsive gamblers and to live in areas where gambling is more prevalent. As a result, they are more likely to suffer from addiction and financial problems. As such, the lottery is a case study in how an allegedly benign activity can undermine our moral and ethical principles.