Public Policy and the Lottery

In the United States, state lotteries are popular and profitable. But they have a problem: They are not really run as public utilities or even as a business, so they tend to operate at cross-purposes with the state’s broader fiscal and social goals. This is a classic case of a piecemeal public policy being driven by the continuing evolution of an industry rather than the broader needs and circumstances of the state.

A lottery is a form of gambling in which numbers are drawn at random to determine winnings. The concept has a long history, going back to a biblical command in Numbers 26:55 that the Lord instructed Moses to distribute land to the Israelites by lottery. A more modern version of the lottery emerged in the late 15th century with local towns raising money to fortify their defenses and help the poor.

Its popularity has increased as a way to raise money for schools, though its alleged regressive effect on lower-income groups remains a major concern. Lotteries have a particular appeal during times of economic stress, when the prospect of tax increases or reductions in public spending may threaten some communities. But they are also widely supported in better economic times, and their success as a source of revenue has not depended on the state’s objective financial condition.

While some people play for the inextricable human desire to gamble, most buy tickets primarily because of the hope that they might win. While this hope is irrational and mathematically impossible, it gives some people, especially those who do not have many opportunities in their everyday lives, value for their ticket purchases.