Does the Lottery Serve the Public Interest?

In the United States, lotteries generate billions of dollars in revenue every year. Some people play for fun, others believe they can win the jackpot and use their winnings to change their lives. But how do the odds stack up? What are the real consequences of gambling, and does running a lottery serve the larger public interest?

The casting of lots to determine fates and fortune has a long history. The first recorded public lottery, in Europe, was held by the Roman Emperor Augustus for repairs in Rome. Later, the wealthy entertained guests at dinner parties by giving them tickets for the chance to win a fancy piece of dinnerware or other such prize. The lottery has also been used to raise funds for military campaigns, civil wars, church construction, university endowments and even the Revolutionary War.

In his book “The Lottery and American Culture,” historian Mark Cohen traces the modern lottery’s evolution. As state governments began to establish their own lotteries in the nineteenth century, he writes, they were “defined politically by an aversion to taxation.” Lotteries seemed like a way to float state budgets without raising taxes and allowing voters to feel that they were supporting government services.

But as lottery revenues grew, this model started to break down. By the nineteen-sixties, inflation and the cost of the Vietnam War had eroded state incomes, making it difficult to balance budgets without cutting programs or increasing taxes, which were unpopular with voters. This is when the lottery’s “painless” image started to fade, as voters began to realize that they were being subsidized by gamblers.

Since that time, lottery proponents have shifted away from the argument that they would subsidize state budgets, instead promoting the idea that lottery money would float a single line item in the state budget—invariably education, but also elder care or public parks, for example. This narrower approach makes it easier to campaign for legalization, because voters can be convinced that a vote for the lottery is not a vote for gambling but a vote for a specific government service they support.

The problem is that this approach also obscures the regressivity of the lottery. While rich people do buy the most lottery tickets, they spend a smaller percentage of their incomes on them than do poor people. In fact, one study found that players earning over fifty thousand dollars a year spend about one percent of their incomes on tickets; those making less than thirty-thousand dollars a year spend thirteen percent. And while the lottery industry argues that it is a harmless form of entertainment, this claim ignores the fact that, for many, playing the lottery amounts to a serious addiction. As a result, millions of Americans continue to spend their hard-earned money on a game with low odds of success. And the state continues to promote it. This is a classic case of public policy being made in fragments, with little or no overall overview and at cross-purposes to the larger interests of society.