The Public Interest and the Lottery
In the United States, lotteries are a huge business and draw considerable public support. In the vast majority of states, more than 60% of adults report playing a lottery at least once a year. Lottery proceeds are devoted to a variety of public and private uses, including education, roads, hospitals, canals, bridges, parks, and churches.
Yet despite the widespread popularity of the games, many people remain unsure of how much winning a lottery ticket actually costs – or even what the odds are of hitting the jackpot. The odds are a little difficult to pin down, because winning the lottery depends on your luck, and luck is not an objective term. Nevertheless, experts say the odds of winning the lottery are about 1 in 3 million.
What is clear, though, is that the lottery is a major revenue generator for state governments. Lottery proceeds provide about a quarter of all state general fund revenues and help pay for an extensive array of services. It is not surprising, therefore, that lottery officials argue that the proceeds are a source of “painless revenue.” In other words, voters support the games because they believe that they are helping their government spend money that would otherwise be taxable, and politicians see the lottery as an effective way to avoid raising taxes.
But there are problems with this narrative. Most importantly, it ignores the fact that lotteries are a form of gambling. And, like any other form of gambling, they have negative consequences for the poor and problem gamblers. Furthermore, when the lottery is a state-run enterprise, its advertising necessarily focuses on persuading people to spend their money on it. This raises the question whether state-run lotteries are at cross-purposes with the general public interest.
Lotteries have a long history in the United States. Benjamin Franklin organized a lottery in 1748 to fund the formation of militias for defense against marauding French soldiers. John Hancock ran a lottery to build Boston’s Faneuil Hall and George Washington operated one to construct a road over Virginia’s mountain passes.
Today’s state-run lotteries are complex, and their evolution has largely been driven by market forces. As the industry has grown, it has attracted large groups of participants with different interests and motivations for participating. These include convenience store operators (the primary vendors); lottery suppliers (who often make heavy contributions to state political campaigns); teachers (in those states in which lotteries are earmarked for education); and state legislators, who quickly develop a vested interest in the industry’s continued expansion.
The evolution of state lotteries has been piecemeal and incremental, with few overall public policy decisions. As a result, state officials inherit policies and a dependency on lottery revenues that they can do little to change. In addition, the centralized authority for the lottery is fragmented between the executive and legislative branches, with the result that many state officials have little knowledge of the industry as a whole. As a result, state lotteries are often at cross-purposes with the general public good.