Public Policy and the Lottery


A lottery is an arrangement in which a prize (such as money or goods) is awarded by the drawing of lots. Lotteries are most often state-sponsored, and are distinguished from other forms of gambling such as poker or blackjack. Although making decisions and determining fates by casting lots has a long history in human societies, the modern practice of conducting public lotteries for material gain dates back to the 17th century. State-sponsored lotteries became widespread in the United States after World War II, and they have become a major source of revenue for many states.

In addition to raising money for state projects, the proceeds from lotteries have also been used as a tool to promote social change. Proponents argue that lotteries are an alternative to increasing taxes or cutting state programs, and they point to the fact that most of the people who play the lottery do so because they want to win. This argument has been successful in winning broad public support for the lottery, and in limiting criticism from those who oppose it.

While the public debate over lotteries has centered on the issue of whether the profits should be used for specific purposes, critics have pointed to problems such as the effect on compulsive gamblers and the regressive impact of the games on lower-income groups. These are issues that can be addressed, but they must be balanced against the fact that the lottery has been successful in raising needed revenues for state governments.

As a result of the wide popularity of state lotteries, legislators and governors are reluctant to allow the state to stop offering new games, even when they no longer bring in substantial revenues. Lottery profits tend to rise dramatically after they begin, and then level off or decline. This is a result of the “boredom factor,” which prompts states to introduce new games in an attempt to maintain or increase revenues.

Moreover, the state’s monopoly on the games gives the state little incentive to limit its operations, since it can rely on revenues from lottery sales to offset budget deficits. In contrast, private gambling companies are usually able to limit their operations in response to market conditions.

State lotteries are a classic example of public policy being made piecemeal and incrementally, with little or no overall vision. When a state establishes a lottery, it typically legislates a monopoly for itself; creates a state agency or public corporation to run the lotteries; begins with a small number of relatively simple games; and, due to pressure from players for more prizes, expands in scope and complexity over time. This is a symptom of the state’s reliance on lottery revenues, and it highlights one of the most dangerous aspects of the industry: its addiction to growth.