Public Policy and the Lottery


A lottery is a gambling game in which people buy tickets for a chance to win a prize, often cash or merchandise. The prizes may be small, such as a few dollars, or very large, such as millions of dollars. Some governments regulate and promote lotteries while others endorse them but do not regulate them. Lotteries are also sometimes used to distribute government benefits, such as units in a subsidized housing program or kindergarten placements. The term “lottery” can also refer to other games of chance, such as the stock market.

Historically, many states have adopted lotteries to raise funds for various public purposes. These include paving streets, constructing wharves, and financing universities and churches. Some states have also used them to support military campaigns or to provide for the poor. In the early American colonies, a popular type of lottery was used to raise money for the colonies’ militias and to construct buildings at Harvard and Yale. Benjamin Franklin sponsored a lottery in 1776 to raise funds for cannons to defend Philadelphia against the British. George Washington even attempted to sponsor a lottery to alleviate his crushing debts, though it was unsuccessful.

While state officials generally see the adoption of a lottery as a wise financial decision, critics argue that its operation is not in the public interest. They cite its purported role in encouraging addictive gambling behavior and its regressive impact on lower-income groups, while also warning that it increases illegal gambling activities. They further contend that the lottery poses a conflict between a desire for higher revenues and a duty to protect the welfare of the general population.

State lottery officials often have difficulty justifying the use of their lottery revenues to legislators and other policymakers, particularly when they face pressure to increase spending or to reduce taxes. As a result, the evolution of state lotteries has often occurred in a fragmented fashion, with lottery operations frequently evolving by piecemeal and incremental steps. This pattern is a classic example of a public policy making process that is driven by immediate needs, rather than the broader considerations of a sound fiscal strategy.

Most people who play the lottery are in the 21st through 60th percentile of income distribution, which means that they do not have much disposable income left over for discretionary spending on other things. This explains why they spend so much of their money on tickets. They are essentially buying hope that they might one day become rich and then do what rich people usually do with their wealth: invest it in assets such as stocks, real estate, and businesses. In addition to a desire to get rich, some people play the lottery to help their families or because they believe that it is a meritocratic way of getting a better life. However, winning the lottery is far from a sure thing and it can even lead to financial disasters for some people who have won large sums of money.