Public Policy and the Lottery


The lottery is the most popular form of gambling in America, and its players spend billions on tickets each year. It has long been promoted as a way for states to raise money without the political cost of taxes, but just how meaningful that revenue is in broader state budgets and whether it’s worth the trade-offs of people losing their hard-earned dollars should be debated before more governments adopt the lottery model.

A lottery is a process for allocating prizes by drawing lots or some other random procedure. Prizes may be of various kinds, including property and cash. In modern times, the term “lottery” is most commonly used in reference to state-sponsored games in which a portion of ticket sales go toward a public prize fund. Generally, the larger the prize pool and the more tickets sold, the greater the chance of winning. In most cases, the prize fund is determined after all expenses are deducted from the total amount of tickets sales and after any profits for the promoter or other revenues have been allocated.

Making decisions and determining fates by the casting of lots has a long history, with dozens of examples in the Bible and several in Roman records, but lotteries for material gain have only recently emerged as a common practice in the West. The first recorded public lottery to distribute prize money took place during the reign of Augustus Caesar, who held a drawing for municipal repairs in Rome.

In the modern era, state lotteries typically start with legislation that establishes a monopoly for the government and an agency or public corporation to run the lottery; they begin operations with a modest number of relatively simple games; and, due to constant pressure to increase revenues, are gradually expanded in size and complexity by the introduction of new games. As a result, few, if any, lotteries have a coherent public policy that guides their development.

The marketing of state lotteries has focused primarily on persuading the population to spend their discretionary income on the game. This is in direct contradiction to the ideals of a well-functioning democracy, in which citizens have the right and responsibility to control their own finances. The promotion of gambling in this manner is also at cross-purposes with the goals of good public policy, such as reducing compulsive gamblers or addressing regressive spending patterns.

People in the 21st through 60th percentile of the income distribution are most likely to play the lottery, and they account for a large share of the total expenditures. Those at the bottom of the distribution simply don’t have enough disposable income to make such large purchases, and the lottery has a regressive impact on low-income families. In addition, the money spent on tickets is a drain on state economies, which already face significant challenges. This money could be put to better use. In addition, the lottery encourages wasteful consumption by encouraging people to buy tickets for products and services that are unlikely to improve their quality of life.