In America, the lottery is a hugely popular form of gambling, with Americans spending over $80 billion each year on tickets. States promote the games as a way to raise revenue for schools and other public services, and many people support them even though they know that the odds of winning are long. But is it right for governments to be in the business of promoting a vice? And if so, what are the trade-offs for the people who lose their money to this irrational activity?
It’s easy to dismiss lotteries as mindless, irrational behavior, and there is certainly an inextricable human impulse that drives many people to play. But that is only part of the story. Lotteries also dangle the promise of instant wealth in an age of inequality and limited social mobility, and they use billboards on highways to lure people into this speculative trap.
The American Heritage Dictionary defines a lottery as “a process of allocating tokens or pieces of merchandise for prizes by chance after a public announcement.” But that is too narrow a definition to capture the complexity and range of activities that have been called lotteries throughout history. They have been used in many ways to promote commerce, reward employees, honor royalty and military service, and allocate housing, among other things.
Lotteries were once an important source of revenue for many colonial governments, including the Continental Congress, which tried to use a lottery to raise money for the Revolutionary war. But by the 1800s, large public lotteries had lost popularity, as a result of scandals and corruption, but private, commercial promotions continued. These lotteries helped fund Harvard, Dartmouth, Yale, King’s College (now Columbia), Union and Brown, and other institutions of higher learning in the United States.
State lotteries attract a broad base of public support, with particular constituencies developing for convenience store operators, lottery suppliers (who make heavy contributions to state political campaigns), teachers (in states where lottery proceeds are earmarked for education) and state legislators. They also rely on a steady stream of donations from philanthropic organizations.
A common argument for state lotteries is that they provide a source of “painless” revenue, because players voluntarily spend their money rather than having it confiscated by the state government for public purposes. This argument is especially effective in times of economic stress, when the prospect of tax increases or cuts in public services can threaten a state’s fiscal health. But studies show that the objective financial condition of a state does not influence its lotteries’ popularity, and even in good times, lotteries have broad public support.
While some states have opted to abolish their lotteries, the vast majority continue to promote them, and they remain the dominant form of gambling in the country. The money that people spend on tickets could be better spent on building an emergency savings account or paying down debt, but the reality is that most Americans do not have this kind of cash available to them, and they feel pressured to gamble.
