The Ugly Underbelly of the Lottery


The lottery is a gambling arrangement in which prize money is allocated by a process that relies wholly on chance. Lotteries are popular with the general public and play an important role in state government, generating revenues for a variety of purposes. They are a major source of funding for education, for example. They also help fund many other public services and amenities.

A modern state legislature creates a monopoly for itself; hires or establishes an agency to manage the lottery; starts with a modest number of relatively simple games; and then progressively expands its size and complexity. In this way, the state tries to make sure that jackpots grow to apparently newsworthy levels and gain public interest.

Lotteries are popular and profitable because they appeal to people’s desire to win, even if the odds of winning are extremely long. Whether the prizes are cash or goods, they provide an escape from the ordinary burdens of life and a sliver of hope that things will be better someday.

But there is an ugly underbelly to the lottery. In most states, a disproportionate share of players and the revenue from the games come from low-income neighborhoods. These residents have far fewer opportunities to gamble than their richer neighbors, and they tend to be more vulnerable to addiction. They also spend a greater proportion of their incomes on lottery tickets, which makes them more likely to suffer from other forms of gambling addiction.

It is true that many of the problems associated with lotteries can be managed. Certainly, states can regulate the games to ensure that they are not addictive. And they can limit the availability of scratch-off tickets and other high-profit formats. But the question remains: Should governments be in the business of promoting gambling, even if it brings in significant revenue?

The answer depends on how one defines “gambling.” There are non-gambling types of lotteries. Examples include military conscription, commercial promotions in which property is given away by a random procedure, and the selection of jury members from lists of registered voters. But most state lotteries are gambling arrangements in which a consideration is paid for the chance to win a prize. In this case, payment consists of the purchase of a ticket.

In the past, when lottery ads stressed how much money was raised for the state by the games, they were attempting to convey the message that anyone who bought a ticket was doing his or her civic duty and helping the children of the state. That is a misleading message, however. It is true that a small percentage of the proceeds goes to state programs, but those funds are just a drop in the bucket of overall state revenue. And the state has lots of other ways to raise revenue, including taxes and fees on those who gamble. In addition, the money that is lost to gambling addiction is not easy to replace, and it may not be recoverable.