The Lottery and Public Policy

A lottery is a form of gambling wherein multiple people buy tickets for a chance to win a large sum of money through a random drawing. It is often run by state or federal governments and is a popular way to raise funds for a wide range of public usages. In the colonial era, it was common for localities to organize lotteries to finance roads, canals, libraries, churches, colleges and even military fortifications. Benjamin Franklin used a lottery to raise money for the purchase of cannons for the defense of Philadelphia during the American Revolution. It was also used in the French and Indian War to finance fortifications and munitions.

In the modern era, states have promoted the lottery as a source of “painless” revenue: a means of generating government receipts that do not require raising taxes or cutting services. As a result, most states have adopted the lottery in recent decades, and they now contribute billions to state coffers each year. The lottery has proved a remarkably potent tool for boosting government revenues, as voters have responded with enthusiasm to its promotion.

The popularity of the lottery has to do with a combination of factors. It is in part a function of people’s natural propensity to gamble. In addition, there is a widespread belief that winning the lottery will provide a way out of poverty or lack of opportunity. The lottery’s marketing campaigns rely on these beliefs, and many players enter with clear-eyed knowledge of the odds (although they may have quote-unquote “systems” that are not grounded in statistical reasoning about lucky numbers or stores or times of day to buy tickets, etc.).

But there is more to the story than this. As Cohen points out, the modern evolution of lottery policies has been one of accretion, with little or no overall policy design. Lottery officials largely act on their own, with very little oversight from legislative or executive branches. Inevitably, lottery policy becomes shaped by a mixture of market forces and political considerations that may have nothing to do with the general welfare.

The result is that lottery policies are a classic example of how public policy decisions are made without a broad overview or consensus on the issue. This is especially true in the case of lotteries, where the benefits and drawbacks are obscured by a complex mix of social, cultural and economic factors that are difficult to pin down. For that reason, it is imperative that states adopt a comprehensive policy on the subject and make it public. To do otherwise would be to ignore a powerful force that can skew public choices and harm the poorest members of society. Posted by James P. Smith, JD, a professor at the University of Maryland School of Law. Follow him on Twitter at @JamesPSmithLaw.

Categories: Gambling