Public Policy and the Lottery


The lottery is a form of gambling that involves people buying a ticket for a chance to win a prize, usually money. It is popular in many countries. Many state governments run lotteries, but the private sector also runs a lot of them. The most common type of lottery is a financial lottery, where players pay to enter and then hope their numbers match those randomly drawn by a machine. This kind of lottery is criticized for being addictive, and for promoting unhealthy gambling habits. Other kinds of lotteries award prizes for things such as units in a housing project, kindergarten placement, or sports tickets.

While the casting of lots to determine fates or distribute goods has a long history (it is described in several places in the Bible) the lottery as an instrument of public policy is of more recent origin, dating at least to the 16th century. Various towns in the Low Countries started lotteries to raise funds for town fortifications, and records of prizes distributed by lot are found in the city archives of Ghent, Bruges, and other towns. By the 17th century, lotteries were being used in colonial America to finance projects such as paving streets and building wharves, and Benjamin Franklin sponsored a lottery to raise funds for cannons to defend Philadelphia against the British.

Modern state lotteries are run like businesses, and their advertising necessarily focuses on persuading targeted groups to spend money on the games. This raises questions about whether the promotion of gambling is an appropriate function for the government, and whether it may be contributing to problems such as poverty and problem gambling. The large jackpots that lottery ads proclaim are another reason for concern. They give the appearance of a massive windfall, and encourage people to buy more tickets. This in turn drives the jackpot up to even more eye-catching levels, and the cycle continues.

Despite their criticism of the practice, some scholars have defended the use of lotteries as a painless way to increase tax revenue without directly raising taxes. The fact that lottery revenues continue to grow despite the economic challenges of recent years is evidence in support of this argument.

However, some researchers have argued that the popularity of the lottery is not related to the overall fiscal health of a state government, and that it is instead based on a perception that the proceeds benefit a specific public good, such as education. They note that states can draw on this argument to sustain a lottery even in times of relatively robust financial health, and they are often able to convince voters to approve the lottery even when the state is not experiencing any significant fiscal challenges. However, this reasoning does not hold up to careful analysis. It does not take into account the ways in which lottery promotion undermines these arguments, and it fails to address the fundamental issue that a state running a lottery is at cross-purposes with its public policies.