The Political Appeal of the Lottery

A lottery is a gambling game in which people purchase numbered tickets for a chance to win a prize. Often the prize is money or goods. It is possible to win more than one item in a lottery, but in most lotteries only the top prize winner receives anything at all. Unlike a game of chance where the outcome depends on luck, the lottery is run by a professional company and has an established system for awarding prizes. Because of its large and predictable revenue stream, lotteries are popular with state governments, which use the funds to fund a variety of public projects, including education.

The drawing of lots to determine ownership or other rights has a long history in human society, including several instances recorded in the Bible. It became common in the fifteenth and sixteenth centuries as a means of raising money for such purposes as towns, wars, colleges, and public-works projects. In the United States, lotteries were introduced in the early seventeenth century. Today, 37 states and the District of Columbia have state-sponsored lotteries, which operate as monopolies and do not allow private competitors.

Since New Hampshire initiated the modern era of state lotteries in 1964, no such lottery has been abolished. Even after criticism of the desirability of a state lottery has focused on its potential for encouraging compulsive gamblers or for having a regressive effect on lower-income groups, most states have been reluctant to eliminate their lotteries.

Advocates of state lotteries argue that such activities can be a painless form of taxation, in which the citizens of a state are voluntarily spending their money on the basis of a perceived benefit to society. This argument is particularly effective during times of financial stress, when voters are concerned about tax increases or cuts in public programs. But studies have shown that the popularity of lotteries is not necessarily linked to the objective fiscal health of a state government; public approval for lotteries has been found to remain high even when state budgets are in good shape.

In addition to the political appeal of state lotteries, they have developed broad, specific constituencies among convenience store operators (who are the primary vendors); suppliers of lottery equipment and services (heavy contributions by these businesses to state political campaigns are commonly reported); teachers in those states in which lottery revenues are earmarked for education; and state legislators, who quickly become accustomed to the extra income. Lottery marketing strategies have been designed to encourage all of these groups to participate, thus increasing total sales and boosting profit margins. Despite this success, there are serious problems with the operation of state lotteries. One of the most obvious concerns is that a significant portion of the revenue is generated by lower-income individuals who are disproportionately likely to play. This behavior reflects the fact that, for most of these players, the entertainment value of winning a prize outweighs the disutility of losing some or all of the money spent on tickets.