Public Benefits of Lottery


In the United States and elsewhere, lotteries are a popular way for people to pay for the chance to win prizes ranging from cash or goods to public services like kindergarten placement or hospital beds. Lottery is also an ancient pastime, with records of it dating back to the Roman Empire—Nero was a big fan—and even the Bible, where casting lots is used for everything from deciding who gets the garments of Jesus after his crucifixion to choosing names for cities and schools. In the nineteenth century, state governments adopted lottery games as a way to raise money for a variety of public purposes, including building roads and bridges, establishing public universities (including Harvard, Dartmouth, Yale, King’s College, and William and Mary) and more.

One important argument for state-sponsored lotteries is that they allow governments to fund many different public services without having to impose especially onerous taxes on middle class and working class citizens. This was an especially powerful argument in the immediate post-World War II period, when the economy was expanding and government budgets were growing rapidly. But this arrangement dissolved in the late 1960s, as inflation and the cost of the Vietnam War increased demand for state-funded services while stoking an anti-tax revolt.

Against this backdrop, lotteries became increasingly popular in the United States. In 1964, New Hampshire held the first state-sponsored lottery and 13 other states followed suit within a few years. By the early 1980s, there were lotteries in every state except North Dakota, which had rejected them as too regressive.

When states promote their lotteries, they usually emphasize that the money raised is going to a public good, such as education. This argument is powerful, especially during times of economic stress, when fears of tax increases or cuts to public programs are high. But studies have shown that the popularity of lotteries is not connected to the actual fiscal circumstances of a state—they are just as popular in times of stability and prosperity as they are during periods of crisis.

Lottery advertising also commonly promotes false or misleading information about the odds of winning, inflates the value of prize money (most jackpot winners are paid their prizes in equal annual installments over twenty years, with inflation and taxes dramatically eroding the current value), and so on. Critics argue that, because the promotion of a state-sponsored gambling enterprise is at cross-purposes with the public interest, it should be subject to regulation.

But while it may be legitimate to regulate the specific operations of a lottery, it is less clear whether or when it is appropriate to regulate the larger culture that it promotes. When a society encourages people to spend their time and money on speculative activities that depend almost entirely on chance, the result is a lot of frustrated, irrational gamblers who feel they have no choice but to keep playing in the hope that they will finally hit it big. That’s a dangerous and corrosive cultural dynamic.