The lottery is a huge business that contributes billions to state coffers every year. It’s also a wildly popular pastime, with millions of people spending tens of dollars each week in hopes of winning the jackpot. But is it really a good idea for states to promote gambling? And if so, how should they go about it?
The answer is not simple. Lottery commissions are businesses with the primary goal of maximizing revenues, and their advertising necessarily focuses on persuading target groups to spend money on tickets. But this approach comes with significant downsides. It can have negative consequences for the poor and problem gamblers, it can obscure the fact that lottery playing is a form of gambling, and it’s at cross-purposes with the larger public interest.
A lottery is a game of chance that involves drawing lots to determine prizes. In the earliest use of this word, it meant the act of casting lots for decision-making or (in late use) divination. It’s now more generally used to refer to any scheme for the allocation of prizes based on chance.
Most state lotteries are run by the government. They begin operations with a modest number of relatively simple games and, under the pressure to generate revenue, gradually expand their offerings. In the process, they often neglect to address important concerns about problem gambling and other aspects of their operations.
Historically, the major argument for state lotteries has been that they are a source of “painless” revenue: that is, players voluntarily spend their money on tickets in return for the promise that the state will use it to fund things that might not otherwise be funded by taxes. But that argument is flawed. It’s not just that lottery proceeds aren’t “painless” for the state: they’re actually quite painful.
The problem with the prevailing message is that it obscures the very large amount of money that states actually make from lotteries. It also obscures the regressivity of these taxes, which tend to hit the middle and working classes much harder than they do richer classes. And, of course, it obscures the fact that lotteries aren’t a very good way to raise the kind of money that states need to provide a basic safety net.
The real solution is to change the underlying culture of state government. Instead of promoting the idea that the lottery is just another fun thing to do, we need to start focusing on how to raise the money necessary to meet our social and economic goals. And that will require a major overhaul of the ways in which state governments conduct business.