Lottery Laws and Public Benefits


The casting of lots to determine a person’s fate or material possessions has a long history in human society. Among the many ancient examples is a biblical command to divide land among Israel by lot (Numbers 26:55-55) and a king’s offering of property, slaves, and even himself to his guests during Saturnalian feasts in Roman times.

The modern era of state-sponsored lotteries began with New Hampshire’s establishment of one in 1964, followed by the introduction of the games by other states in the 1970s. Unlike private commercial gambling, lottery operations are usually legislated by the state government, and public corporations are generally established to manage the businesses. The resulting monopoly typically operates with a high level of bureaucracy and centralized control. State agencies oversee the lottery’s promotion, select and license retailers, provide training for those who sell tickets, train employees of retail outlets to use lottery terminals and answer player questions, administer prizes, pay top-tier winners, and so forth. In addition, the state’s general welfare is a key constituency that state legislators and lottery officials seek to please, and revenues are heavily earmarked for education.

State lottery operators have developed an effective strategy for winning and retaining broad public approval. They argue that lottery proceeds are used to support a specific public good, such as education, and this argument is especially powerful in times of economic stress when a state’s fiscal health is threatened by tax increases or budget cuts for other programs. But research by Clotfelter and Cook suggests that state governments’ actual financial conditions have little to do with whether or when they establish lotteries.

Lotteries are a form of gambling and, like all gambling activities, they generate considerable controversy. Some critics are concerned that lottery players may become compulsive gamblers, while others point to the disproportionately large numbers of low-income and minority people who participate in these games. A third line of criticism concerns the regressive impact that lottery revenues have on state budgets, especially in lower-income areas.

But the vast majority of people who play lotteries do so for a simple reason: They want to win. The massive publicity campaigns that surround each drawing of the Powerball or Mega Millions jackpots entice people to spend money on a chance to win big. It’s an inextricable human impulse that lottery marketers exploit, and it is one of the main reasons why lotteries have remained so popular.

The problem with this inextricable human impulse, however, is that people who play the lottery often lose a great deal of money. They may win the big jackpot and then find themselves in debt or in a financial bind, and they can easily get discouraged and stop playing. And when that happens, the lottery’s popularity is likely to suffer. This has fueled the steady expansion of lottery games, and the constant introduction of new types of games to maintain interest and revenues. Despite these concerns, the overwhelming majority of Americans continue to support lotteries.