Public Policy and the Lottery

The lottery is a form of gambling in which a large number of people pay small amounts of money for the chance to win a much larger sum, often millions of dollars. Lotteries are usually run by governments, but they may also be privately organized. In either case, the prizes are distributed through a random drawing. The draw is not necessarily held on the same day that the ticket was purchased, and the winning tickets are normally published on the day after the drawing.

The casting of lots for decisions and fates has a long history (including several instances in the Bible). However, lotteries were not widely used until the 15th century when they began to be used for raising money, typically for town repairs and the poor. The first recorded public lotteries to sell tickets and offer prize money were held in the Low Countries, for example in Bruges and Ghent, to raise funds for town fortifications.

In modern times, lotteries are a popular way for people to get the money they need to buy homes and cars, to send children to college, or simply to supplement their incomes. In addition to providing a means of getting needed cash, the proceeds of a lotto also provide tax revenues that may help fund other government services. As a result, many states have lotteries.

Despite the popularity of lotteries, they are often subject to a variety of criticisms, including concerns that they are addictive and have a regressive impact on lower-income groups. Some of these criticisms have a basis in the underlying mathematics of the lottery, but others have less to do with the math and more to do with public policy.

In almost all cases, when a state adopts a lottery, it legislates a monopoly for itself; establishes a state agency or public corporation to run the lottery (rather than licensing a private firm in return for a share of the profits); begins operations with a modest number of relatively simple games; and, as pressure mounts for additional revenues increases, progressively expands the lottery’s operation and complexity. Hence, the state lottery is a classic example of public policy that is made in piecemeal and incremental fashion, with a limited degree of overall oversight or guidance.

The only six states that don’t have lotteries are Alabama, Alaska, Utah, Mississippi, and Nevada—perhaps not surprisingly, because these states already allow gambling and want to keep their own slice of the revenue. Other reasons for their absence include religious concerns, the desire to avoid a conflict of interest with casinos, and the fact that Alabama and Utah have no state budget at all. But, as the BBC notes, the objective fiscal circumstances of a state do not seem to influence the decision whether or not to adopt a lottery.