Public Policy and the Lottery


A gambling game or method of raising money in which a large number of tickets are sold and a drawing is held for certain prizes. Often a single prize is offered, but sometimes several prizes are awarded. In the United States, state lotteries are a major source of revenue and public benefit; for example, they support education, public health, and the environment. The word lottery is derived from the Dutch noun lot, meaning “fate.” It is also used to refer to other schemes for distribution of prizes by chance. Examples include the selection of military conscripts by lot, commercial promotions in which property is given away by a random procedure, and the selection of jury members from lists of registered voters.

Many governments, especially those with weak fiscal balance sheets, have turned to the lottery to boost their tax revenues and improve their public budgets. Advocates of the lottery argue that it is a painless form of taxation, in which people voluntarily spend their own money for a public good. The problem, critics charge, is that lotteries promote addictive gambling behavior and have a significant regressive impact on lower-income groups.

Most states’ lotteries started as traditional raffles in which players purchase tickets for a future drawing, typically weeks or months in the future. Then innovations introduced in the 1970s, particularly scratch-off tickets, changed the industry. These games were less expensive to produce and required a much shorter time period for players to wait for the results. They proved extremely popular and allowed states to increase their sales.

These trends have continued, even in the face of research suggesting that instant games are less attractive to players than traditional games and lead to lower player satisfaction levels. At the same time, public officials have had to keep increasing their stake in lotteries in order to meet ever-increasing revenue targets.

While a small percentage of ticket sales goes to the prizes, most of the proceeds go to the state government for general purposes. The problem is that this means that state authorities are inherently at cross-purposes with the broader public interest: They have a vested interest in keeping lottery sales up, but they also have a responsibility to protect citizens from the harmful effects of gambling and other forms of risk-taking.

In addition, the way in which state lotteries are run is a classic case of public policy being made piecemeal and incrementally, with little or no overall oversight. As a result, the interests of problem gamblers, poor communities, and the general welfare are only intermittently taken into consideration as the lottery industry evolves.