The Benefits of a Lottery


A lottery is a form of gambling in which people pay an amount to be randomly drawn for a prize. It is the most popular form of gambling in the United States. It is often criticized as addictive and harmful to society. Its defenders argue that it provides a necessary source of revenue for state governments and other public institutions.

Since New Hampshire initiated the modern era of state lotteries in 1964, almost every American state has adopted one. They have all followed remarkably similar patterns. State legislators first legislate a lottery, granting it a monopoly and creating a state agency or public corporation to run it. They begin with a small number of relatively simple games, and then, as revenues grow, they progressively add more complex games. The state’s general fiscal health appears to have little bearing on whether or when it adopts a lottery, as state lotteries typically win broad public approval even when the state government is not experiencing financial stress.

The casting of lots to determine fates and distribute property has a long history, including several instances in the Bible and Roman imperial lotteries for land and slaves. Public lotteries in the United States and other parts of the world have been a frequent source of painless revenue for state government—as evidenced by their popularity during the American Revolution and their contribution to the building of Harvard, Dartmouth, Yale, and other American colleges. The lottery is the earliest example of what might be called “smart” taxation—a mechanism for generating revenue from a voluntary, consumer-driven activity rather than from a coercive mandate to pay taxes.

In the immediate post-World War II period, the lottery was a source of revenue that permitted state governments to expand their array of services without increasing especially onerous taxes on middle and working classes. As inflation and the cost of paying for the Vietnam War eroded that arrangement, it became more important to generate additional revenue from more than just the lottery.

By the mid-1970s, lotteries had become a major part of the American economy, and they now account for about 15% of all state revenues. They are also a significant source of federal revenues, particularly in the Northeast. In addition to their role in the national economy, lotteries have a variety of other significant effects. They promote consumption, especially of food and alcohol; they tend to increase the relative fortunes of poor families; they lead to increased use of drugs; and they are a cause of gambling addiction in some individuals.

Despite their wide public appeal, lotteries remain controversial. Their critics focus on specific features of the operation of a lottery and its operations, including the problem of compulsive gambling and their alleged regressive impact on low-income groups. They are also concerned about the potential for state corruption and other problems of governmental integrity. Lotteries do play a useful social role, but their impact on society deserves greater scrutiny. In an empathetic society, the lottery should be used for the betterment of the masses, not as an instrument of greed and self-indulgence.