The Public Interest in the Lottery

A lottery is a form of gambling in which numbers are drawn to determine winners of prizes. Prizes can be anything from cash to goods, but most states limit the value of prizes to a maximum amount, such as $1 million. Unlike other forms of gambling, the chances of winning a lottery do not depend on previous play or previous results; the odds are independent of past events and are the same for all tickets purchased. Lotteries are common in many countries and have been used for hundreds of years, both as a way to distribute property and as entertainment at public gatherings. In modern times, lottery proceeds have financed everything from military conscription to commercial promotions and the selection of jury members.

When governments introduce lotteries, they usually establish a state-owned monopoly; begin operations with a modest number of relatively simple games; and then, due to constant pressure for additional revenues, progressively expand the program by adding new games. Lotteries are a classic example of the piecemeal and incremental nature of public policy-making, in which decisions are made at a local level with little or no overall overview. The result is that the public’s interest in the lottery is often overlooked.

For the most part, state-sponsored lotteries promote themselves as a source of “painless” tax revenue: players voluntarily spend their money for the opportunity to win a substantial prize, and in return state politicians receive additional funds without raising taxes. While this argument may work in some situations, it fails to take into account the fact that lottery revenues are not a substitute for state spending; they are merely a supplement to existing sources of revenue.

Lotteries also tend to rely on the message that their proceeds support some specific public good, such as education. This message is likely effective, particularly during periods of economic stress, when the public is apprehensive about potential state budget cuts and tax increases. However, studies have shown that the popularity of the lottery is not directly linked to a state’s fiscal condition.

There is a certain inextricable human tendency to gamble, and there’s no doubt that the prospect of instant riches is very appealing to a large segment of the population. But there’s also no question that state-sponsored lotteries are a major factor in the rise of inequality and the erosion of social mobility in our society.

To make their product more appealing to consumers, state-sponsored lotteries frequently misrepresent the odds of winning, inflate the value of the prizes (most lottery jackpots are paid in equal annual installments over 20 years, with inflation and taxes dramatically eroding the current value), and generally skew consumer perceptions of risk. In short, they exploit people’s irrational and pro-gambling biases. In doing so, they undermine societal morale and create an atmosphere of distrust and resentment. This is why it’s important to understand the forces driving state-sponsored lotteries, and to fight them wherever they are found. A version of this article appeared in the September/October 2016 issue of City Journal, and is reprinted with permission.