Public Policy and the Lottery


The lottery is one of the world’s most popular gambling games. Its popularity is driven by a simple human impulse: People like to gamble. But it’s also fueled by the promise of instant riches. In an era of increasing inequality and stagnant social mobility, lottery advertising is a powerful tool for selling a dream.

Lotteries have a long history. The casting of lots to determine fate has been recorded as early as biblical times, while public lotteries are more recent. In Europe, the earliest known public lottery was organized by Roman Emperor Augustus for the purpose of repairs in the city of Rome. The prizes in this lottery were articles of unequal value, and the tickets were distributed to guests attending a special dinner party at which the Emperor was present.

Most modern state lotteries are based on a simple premise: The public buys tickets for a drawing at some future date. The number of tickets sold determines the prize amount. The odds of winning are typically quite high. But the actual prize amounts are usually quite low, often just a few thousand dollars. The first state-run lotteries in the United States were little more than traditional raffles, with participants buying tickets for a drawing that took place weeks or even months in the future. New innovations in the 1970s dramatically changed the lottery industry. The introduction of “instant games” offered lower prize amounts and higher chances of winning, attracting more players. Revenues for these types of games increased rapidly, but they eventually leveled off and began to decline. The industry responded by introducing new games, in the hope of maintaining or increasing revenues.

The success of the lottery as a source of state revenue is due to its ability to win widespread public approval. It is a form of taxation that is viewed as relatively painless. Studies have shown that state lotteries are very effective in generating support for a particular public good, such as education. The fact that the public is voluntarily spending money to benefit society is widely seen as a significant advantage over the more direct and politically contentious methods of raising state government funds.

But the success of the lottery as a source of public funds is not without its problems. State officials often neglect the basic principles of sound public policy when running the lottery, in favor of more narrow and immediate concerns about the promotion of gambling, its potential negative consequences for lower-income groups, and its regressive impact on those who are least likely to play. The continuing evolution of the lottery is a classic example of how state policy is made piecemeal and incrementally, with few overall guidelines. The result is that the lottery becomes a major source of income for many state governments, while at the same time it undermines the political capacity of those same officials to do much more to improve the quality of life for their citizens.