Lottery is the name given to a system of public or private money-raising in which prizes are awarded by chance selection. It is most often used to raise funds for a specific purpose, such as providing public services, building infrastructure, or helping the poor. Prizes are usually cash, goods, or services. A lottery is a form of gambling, and in the United States, it is legal only where state laws permit it.
Lotteries have become extraordinarily popular in the United States, accounting for more than half of all state government revenue. In a political climate where tax cuts are prevalent, it is easy to understand why state governments find it appealing to offer more forms of gambling that will bring in more revenue.
Despite the enormous success of lottery sales and the public’s enthusiasm for them, lotteries have their problems. They have become a powerful force in influencing how we spend our money, a fact that should be of concern to any legislator who wants to limit the influence of the lottery industry over our lives.
The first problem is the way in which state lotteries have evolved. Once a lottery is established, it largely becomes a self-perpetuating juggernaut: It expands by adding new games; generates more and more revenue, making it harder to reduce its size; and ultimately leads to a state dependency on this “painless” source of income.
A second issue is the way in which state lottery officials communicate the message that winning the lottery is a great thing. The promotional message largely consists of telling people that playing is fun and that the experience of scratching a ticket is enjoyable. But it also obscures the regressivity of lottery play, by implying that only people with low incomes should be allowed to play.
In addition, the way that lottery officials promote their message tends to be highly partisan: They emphasize that lottery revenues benefit education, and they point to the large number of children who receive scholarships from lottery funds, thereby implying that anyone who doesn’t play is not doing his or her civic duty. Lottery revenues are actually much lower than most other sources of revenue, which means that the money that goes to schools and other worthy programs is not nearly enough to meet the need.
Finally, many state lotteries have failed to develop any kind of overall strategy for managing their reliance on this type of revenue. Instead, they have tended to make policy decisions piecemeal and incrementally, with little or no general overview. In most states, the evolution of the lottery has been driven by an ongoing need to generate revenues and by the pressures of competition.
The history of the lottery in the United States has been a particularly interesting example of how well-meaning and naive attempts to control state gambling can backfire. In the immediate postwar period, when most states began establishing their lotteries, they did so with the belief that they could use the proceeds to improve the quality of public services without raising taxes on the middle and working classes. But the lottery has proven to be a regressive and self-defeating form of taxation, and it is time that we took stock of its role in state governance.