Public Welfare Concerns About the Lottery


As state governments struggle to find new ways to raise money, many are turning to the lottery. Lotteries are attractive to states because they appear to be a low-cost alternative to raising taxes and cutting other public services. They also have the advantage of broad public support, allowing them to weather the storms that might otherwise shake other forms of state financing. But lottery critics point to a number of problems with state-run lotteries, including the way they are promoted, their effects on poor people and problem gamblers, and their alleged regressive effect on lower-income groups.

The idea of distributing prizes by chance has a long history in human society. The casting of lots for property, for example, is recorded several times in the Bible, and the first known public lottery, to distribute prize money for municipal repairs, was held in 1466 in Bruges in what is now Belgium. More recently, public lotteries have been used to raise money for everything from polio vaccines to public works projects and college scholarships.

In general, lotteries involve a group of people buying tickets for the chance to win a specified sum of money or other prizes. The tickets typically carry a fixed price — usually the equivalent of one dollar – and a set of winning numbers, with the odds of winning varying by the type of ticket bought. The tickets are sold by a central agency that manages the sale and distribution of the tickets, collects and disburses the prize funds, and manages the underlying administrative operations. Typically, a percentage of the tickets are retained by the central agency for operating and promotion costs. The remaining prizes are awarded to the winners.

Once a lottery is established, it can become a highly profitable enterprise, and the revenues generated can be used to fund a variety of government services. As a result, state officials often feel compelled to continually introduce new games in order to maintain or increase their revenues. The constant introduction of new games, however, has raised serious concerns about the potential negative impact on the broader public welfare.

Those most likely to play the lottery are those who have limited alternatives to spending their money on other entertainment options. Thus, lottery plays tend to be disproportionately low-income, less educated, and nonwhite. Moreover, as incomes rise, the number of people who participate in the lottery declines.

The lottery is a classic example of an incremental approach to public policy, and the resulting plethora of specific programs makes it difficult to see the big picture. This makes it easy for public policy makers to become inflexible, and unwilling to change even if changes might improve outcomes. In addition, the fragmented nature of lottery authority means that the public has little direct control over the operation of a state-run lottery. As a result, the evolution of a lottery can be driven by industry trends rather than by the general interest in public welfare.