Should the Government Be in Business of Running a Lottery?

Lottery is a game where participants pay for the opportunity to win life-changing sums of money by matching numbers through a random drawing. Although lotteries are often associated with gambling, they have also been used to decide on a range of other things, from sports drafts to the allocation of limited medical treatments. While making decisions by casting lots has a long record in human history, the use of lotteries to distribute material goods is of more recent origin.

Lotteries enjoy broad public support. In states with a lottery, 60% of adults report playing at least once a year. They also develop broad specific constituencies: convenience store owners (the usual vendors for lottery tickets); lottery suppliers (heavy contributions by suppliers to state political campaigns are often reported); teachers (in those states where lottery revenues are earmarked for education); and state legislators (who quickly become accustomed to the steady flow of new revenue).

But lotteries have significant disadvantages. For starters, the odds of winning a big prize are vanishingly small, and frequent ticket purchases can rob people of other opportunities—for example, the chance to save for retirement or pay off debt. And, because lottery proceeds go to state governments, they can put those governments in a precarious fiscal position—especially when the lottery is marketed as a way to alleviate pressing needs.

In addition, because lottery marketing focuses on persuading people to spend their money on the chance of winning large prizes, it can have negative social impacts, including promoting compulsive gambling and fostering resentment toward lower-income people who are disproportionately likely to buy tickets despite the low odds. These issues raise important questions about whether a government should be in the business of running lotteries.