The Politics of the Lottery

A lottery is a game wherein people have the chance to win a prize by chance. The casting of lots for decisions and property distribution has a long record in human history, beginning in the Bible (where Moses was instructed to count the Israelites and divide their land) and continuing with Roman emperors who used it during Saturnalia feasts to give away slaves. The modern public lottery traces its roots to the 15th century Low Countries where towns held private lotteries for town fortifications and to help the poor. Lotteries were brought to the United States by British colonists.

State-sanctioned lotteries have proved to be popular, gaining wide acceptance in most states. They provide governments with a source of “painless revenue”: citizens voluntarily spend their money in order to support government services. The resulting revenues, especially when combined with state sales taxes, are an important supplement to state budgets. The main objections to the lottery come from critics who claim that it promotes addictive gambling behavior and is a major regressive tax on lower-income groups. Despite these arguments, most states continue to have lotteries.

The establishment of a lottery involves numerous political decisions that shape the overall operation of the system. Typically, the state legislates a monopoly for itself; establishes a public agency or corporation to run the lottery; starts operations with a modest number of relatively simple games; and then, due to the constant pressure to increase revenues, progressively expands the lottery’s scope and complexity, particularly in the form of adding new games.

This process of expanding the lottery in order to attract more players and generate higher revenues has generated its own set of problems. For one thing, it has shifted the lottery’s primary message from that of a civic duty to that of an opportunity for instant wealth. The latter, in turn, has led to the proliferation of billboards promoting the latest multimillion-dollar jackpots.

In addition to the message of wealth, the lottery has been able to build up an extensive and powerful constituency in many states. Its supporters include convenience store owners, who benefit from lotteries’ heavy advertising; lottery suppliers, whose employees regularly vote in elections to state legislatures; teachers, whose salaries are often augmented by lottery revenues; and politicians, who quickly become accustomed to the extra income.

The evolution of state lotteries is a classic example of the way that public policy is made piecemeal and incrementally, with little or no general overview. Once established, the lottery becomes a self-perpetuating machine that draws in taxpayers and creates a dependency on its revenues. Consequently, the state’s original intentions in setting up the lottery may be forgotten. Moreover, as the lottery grows, there is no effective way to rein in its growth or control its impact on society. In this article, we discuss some of the most pressing issues associated with lotteries and their expansion. We also offer some proposals for reform. This is a reprint of an article originally published in the Spring 2016 issue of Public Policy magazine.