The Lottery

A lottery is a contest in which tokens are distributed or sold, and the winners selected by lot. Prizes may be money or goods. The casting of lots for decisions and determining fates has a long record in human history, including several instances in the Bible. The first recorded public lottery to distribute tickets and prizes in exchange for money was held during the reign of Augustus Caesar to raise funds for municipal repairs in Rome. Lotteries were a common feature of the Low Countries in the 16th and 17th centuries, for town fortifications, charitable purposes, and the building of churches. The oldest running lottery is the Staatsloterij in Belgium, founded in 1726.

State-sponsored lotteries typically enjoy broad public support, with 60 percent of adults playing at least once a year. They also develop extensive specific constituencies, including convenience store operators (the usual vendors); lottery suppliers (heavy contributions by these companies to state political campaigns are regularly reported); teachers (in those states in which lottery revenues are earmarked for education); and state legislators, who become accustomed to the steady flow of new revenue.

While the public is generally supportive of the lottery, there are some serious issues involved with state involvement in gambling. Most importantly, it is not always clear that lotteries promote responsible gambling. The promotion of gambling is especially problematic in an era when economic inequality and limited social mobility have increased the appeal of instant riches, which are promised by lottery commercials on TV and billboards.

Moreover, the way state lotteries are run, with a constant focus on maximizing revenues, tends to place them at cross-purposes with general public welfare concerns, such as those relating to poverty and problem gambling. Lottery commercials frequently portray winning players as being “good citizens,” and they play on the widespread belief that buying a ticket is a kind of civic duty.

A second issue is the fact that state lotteries tend to produce a pattern of revenues that begins with a boom, leveling off and sometimes even falling over time. As a result, state officials are constantly looking for new games to sustain or increase revenue, and promoting them aggressively through advertising.

Finally, the fact that state lotteries have a businesslike focus means that they are competing with other forms of gambling for the same pool of potential players. As a consequence, their revenue streams are vulnerable to fluctuations in consumer demand. In addition, they have little to no control over the types of gambling offered by private enterprises. This dynamic has led to a growing number of criticisms that state-sponsored lotteries skew the market for gambling in America. These criticisms are often couched in the language of public finance, with references to the “market failures” that occur when governments regulate gambling. However, many economists believe that the problems with government regulation of gambling are far more complex than those described in this article.