Lottery – Why Do People Play?

Lottery is a form of gambling in which people try to win money or other prizes by chance. The casting of lots to determine fates and property rights has a long history, including in the Bible (see Numbers 26:55-56). Public lotteries offering tickets for sale with prize money were first recorded in the Low Countries around 1466. They were initially used to raise funds for town fortifications and to help the poor.

State governments now sponsor dozens of lotteries, and each one has its own particular rules and prizes. Some are earmarked for specific programs, such as education or veteran’s health care. Others use the proceeds to reduce property taxes or to help pay for other state expenses. In many cases, lotteries have broad popular support. For example, a national survey found that 60 percent of adults play at least once a year. In addition to the general public, lotteries also develop extensive specific constituencies: convenience store operators, lottery suppliers (heavy contributions by these businesses to state political campaigns are often reported), teachers in states that earmark lottery revenue for education, and state legislators.

In general, people who buy lottery tickets do so because they believe the risk-to-reward ratio is favorable. They may not understand that by participating in a lottery they are contributing billions to government receipts that could otherwise go to other purposes, such as helping working people retire or pay for their children’s college tuitions. Even small purchases of lottery tickets add up over time and can prevent them from saving for retirement or other important goals.

The popularity of lotteries has increased in recent years, in part because of the growing fear that state governments may have to cut back on social safety nets. But studies show that a state’s actual fiscal condition does not seem to have much impact on whether or when a lottery is adopted.

In fact, the evidence suggests that the main reason state legislatures adopt lotteries is that they believe them to be a good way to raise money without increasing taxes. That is a flawed view. It assumes that a large percentage of lottery revenues will be spent on a program, such as education, but the truth is that the amount spent on those programs will be reduced by the amount that would have been allocated from general fund appropriations had the legislature not earmarked the lottery revenues.

In addition, critics charge that the earmarking of lottery revenues is misleading because it allows the legislature to reduce appropriations for a particular program without actually saving any money. In effect, the legislature simply shifts monies from the general fund to the lottery, which will eventually be returned to the general fund for other uses.