Lottery Adoption and Public Benefits


A lottery is a form of gambling in which players purchase tickets to win prizes such as cash and goods. State-sponsored lotteries generate more than $100 billion per year in ticket sales, making them one of the world’s largest industries. The popularity of lotteries has given rise to a number of important issues, including the role of government in promoting gambling and the extent to which lottery revenues benefit the general public.

Historically, the principal argument used to promote the adoption of a state lottery has focused on its value as a source of “painless” revenue—that is, it raises money for government programs without increasing taxes on the general population. The appeal of this argument is particularly strong in times of economic stress, when voters and politicians are especially sensitive to the prospect of increased taxation and cuts to government services.

Lottery operators and sponsors also emphasize the social good that is supposedly promoted by lotteries. They argue that by allowing people to win big sums of money, the lottery helps alleviate poverty, improve education, and otherwise contribute to the well-being of the community. This message is appealing to many people, but it obscures the fact that the lottery is a massively regressive form of gambling and that it raises enormous amounts of money for relatively few recipients.

In addition, state lotteries tend to benefit the wealthiest segments of the population. A large percentage of the winnings are paid out in lump sums, which is advantageous to wealthy winners but disadvantageous to those who must stretch their money over several years or more. This disparity has prompted critics to charge that the lottery is unfair to the poor, who are unlikely to win large jackpots, and to those with less formal education, who tend to play the lottery at lower rates than other groups.

The practice of making decisions and determining fates by the casting of lots has a long history, with several instances recorded in the Bible. The modern lottery, however, is of more recent origin. The term is believed to have been derived from the Dutch word for drawing lots, a calque on the Middle French word loterie (literally “action of drawing lots”).

The first American state lotteries began operating in the early 1960s. Since then, the majority of states and the District of Columbia have adopted a lottery. While lottery adoption has varied considerably across the country, there are a few common patterns: a state creates a monopoly for itself by legitimating the game as a tax-exempt public service; establishes an agency or public corporation to run the lottery, rather than licensing a private firm in exchange for a cut of the proceeds; begins operations with a modest number of relatively simple games; and progressively expands its offerings.