Public Policy and the Lottery


A lottery is a method of raising money by selling tickets and holding a drawing for prizes. The prizes may be money, goods, or services. Lotteries are popular with the public and have a long history, dating back to the medieval world. They are a common means of raising funds for a variety of purposes, including government, charity, and sports events. Some states have regulated lotteries, while others have delegated the responsibility for them to private companies. In addition, some countries have laws regulating the number of games and the amount of prize money.

A state-sponsored lottery is a classic case of public policy being made piecemeal and incrementally, without any general overview. Authority for a lottery is divided between the legislature and executive branch, and further fragmented within each, with little or no overall oversight. This approach ensures that the lottery is driven by revenue pressures, rather than a sense of the public good. In the end, few if any states have a coherent gambling or lottery policy.

The first modern lotteries, organized for the purpose of raising public funds, appear in the Low Countries in the 15th century, with towns offering prizes to encourage business and fortify defenses. The concept spread throughout Europe, and Francis I of France authorized the establishment of a lottery in Modena in 1520.

Lotteries became a major source of income in colonial America, funding road, canal, and bridge construction, as well as churches, schools, and colleges. Benjamin Franklin held a lottery in 1776 to raise funds for cannons to defend Philadelphia against the British, and Thomas Jefferson sponsored one in 1826 to alleviate his crushing debts.

State lotteries have long been a key source of revenue for many state governments, but their popularity has risen and fallen in response to changes in the economic climate. Studies have shown that state lotteries win broad public approval only when they are framed as a “voluntary tax” for a particular public good, such as education. Otherwise, they are likely to be criticized as a corrupting vice and an irrational form of gambling.

Despite criticisms of the lottery’s regressive nature and problems with compulsive gamblers, lottery officials insist that their main messages are the reassurance that playing the lottery is fun and a worthwhile experience, and that people can use it as a tool to improve their lives. But these messages obscure the fact that lottery play is a serious and expensive undertaking, and that it has profound implications for lower-income communities. Moreover, the fact that lottery revenues expand dramatically after their introduction and then level off or even decline is a significant impediment to maintaining their popularity. It also undermines the claim that lotteries are a safe and effective way to raise taxes. This is a serious problem for an industry that has grown to include almost all states. It’s time to take a hard look at the facts and make some changes.