Public Policy and the Lottery


Lottery is a popular form of gambling. Its roots go back centuries. The Old Testament instructed Moses to take a census of Israel and distribute land by lot, and Roman emperors gave away property and slaves through lotteries held during Saturnalian feasts. Lotteries are often touted as the best way to give state governments a new source of revenue. But they are not without costs, and these may far exceed the benefits.

Public lotteries were introduced in America in the 18th century, and played a prominent role in financing many projects in colonial America, including paving streets, building wharves and churches, and establishing colleges such as Harvard and Yale. In addition, the Continental Congress voted to establish a lottery to raise funds for the American Revolution. Although this lottery was ultimately abandoned, private lotteries continued to grow rapidly. In the early 1900s, the Boston Mercantile Journal reported that nearly a dozen different games had been established.

Today, lottery revenues remain a significant source of revenue for many states, and the industry continues to expand. In addition to the traditional numbers games, lotteries now offer video poker and keno, as well as a variety of scratch-off tickets. Some states also have laws permitting players to combine several numbers in a single ticket. But while lotteries have become increasingly popular, their growth has not eliminated the negative effects they have on poor people and problem gamblers.

Lottery ads make a big deal of the fact that winning the jackpot is a once-in-a-lifetime event. The reality is that winning a lottery prize will rarely happen to anyone, and even if it does, the odds of doing so are incredibly slim. But that doesn’t stop many people from spending their hard-earned money on a hope for riches that is unlikely to ever come true.

A major challenge for public policymakers is how to ensure that lottery profits are used wisely. They must balance the need to attract new participants with a desire to limit the negative impacts of the lottery on low-income communities and individuals. They must also address the problem of escalating jackpots, which draw the attention of news media and drive ticket sales.

The way that states develop and manage their lotteries is a classic case of public policy being made piecemeal, with little or no overall overview. This makes it difficult to measure whether lotteries are fulfilling their important public service functions. In addition, because the state lottery is run as a business that is primarily concerned with maximizing revenues, it tends to operate at cross-purposes with the larger public interest. That’s a dangerous combination. The good news is that it is possible to minimize problems, and there are lessons to be learned from the past. Fortunately, many state-level officials have learned these lessons and have taken steps to improve the lottery. These include requiring a minimum of 30 percent of the total prize pool to go toward education. Other states are requiring that a percentage of the total prize fund be used to help veterans, and a few are setting aside some of the proceeds for community infrastructure.