Public Policy and the Lottery


Lottery is a story of chance, but one that also has an important public policy dimension. The ongoing evolution of state lotteries is a classic example of policy making that happens piecemeal and incrementally, without any general overview or control, with the result that the lottery is often at cross-purposes with public welfare.

A lottery is a state-sponsored game in which participants buy tickets for a drawing to be held at some future date and, if they win, receive a prize. While the earliest lotteries in Europe were used to distribute property or slaves, modern lottery prizes usually consist of cash. Lotteries are popular sources of state revenues. Unlike taxes, which require a political effort to gain voter approval, lotteries are viewed as painless revenue. This makes them attractive in times of economic stress, when states need to raise taxes or reduce public spending.

When a state establishes a lottery, it legislates a monopoly; selects a public corporation to run it; and begins operations with a modest number of relatively simple games. Over time, the lottery expands in size and complexity. Revenues typically grow rapidly after a lottery’s introduction, then level off and eventually decline. Lottery officials then resort to the advertising of new games in a attempt to maintain or increase revenues. In the process, they create and promote a culture of gambling, with all its attendant problems.