The Lottery and Public Policy


The lottery is an institution in which a prize of money or goods is awarded to a winner, based on a random selection of participants. Modern lotteries have several applications, including those for military conscription, commercial promotions in which property is given away by a random procedure, and the selection of jury members. It also includes the drawing of numbers for various public purposes, such as a raffle for a car or a vacation home, and state-run games of chance such as the keno and video poker. The main issue with lottery policy is that it represents an attempt by government at any level to profit from gambling. This is an especially delicate issue in an era in which many voters are anti-tax and politicians view lotteries as a painless source of revenue. Moreover, once the lottery is established, governments find it difficult to stop offering new forms of gambling.

Despite the fact that the casting of lots for decisions and fates has a long history, with references in the Bible, the modern lottery is relatively recent and has grown rapidly since its introduction in 1964 by New Hampshire, the first state to adopt it. Since that time, it has become one of the most popular forms of gambling in the world and is operated in all but a few states. Its popularity is often tied to a claim that the proceeds support a particular public good, such as education. This is an effective argument in times of economic stress, but studies have shown that lotteries win broad public approval even when the states’ actual fiscal health is strong.

In order to run a successful lottery, the organizers must ensure that the number of winners is proportional to the total ticket sales. They must also ensure that the total prize pool is large enough to attract potential bettors. A percentage of the pool is required to pay operating costs and profits to the lottery operator. This leaves the remainder for the prizes, which can range from a few large cash prizes to multiple small ones. Ticket sales increase dramatically for rollover drawings, where the winning amount is doubled or tripled.

Although the monetary gains from playing the lottery can be substantial, most people play for entertainment value and other non-monetary benefits. For some individuals, these gains can outweigh the disutility of a monetary loss. If this is the case, buying a ticket is a rational choice.

But promoting gambling does have serious costs, particularly for poor and problem gamblers. And, while it is true that lottery revenue is relatively low compared to the total budget of the state, the question remains whether the state should be in the business of promoting gambling. This is an especially important question in an era when state governments are increasingly dependent on lotteries for revenue, and they face constant pressure from voters to increase the size of their games. Moreover, the fact that the majority of lotteries players are men, and that the lottery is disproportionately played by middle-income people, suggests that government at any level is at risk of becoming addicted to a form of gambling that it should avoid.