Lottery – Is it Right for the State to Run a Lottery?

Lottery is the practice of distributing prizes based on random selection. It is a popular form of gambling and has a long history in human culture. For example, the ancient Israelites used to draw lots for land distribution, and the Roman emperors gave away slaves by lottery during Saturnalian feasts. Today, state-sponsored lotteries are a common part of contemporary life.

Most states establish lotteries as a means of raising money for public usages such as education or infrastructure repair. This is often argued as a painless alternative to taxation and has won broad public support. Yet, as Clotfelter and Cook note, the popularity of a lottery does not seem to be related to the objective fiscal condition of a state government.

While the odds of winning are slim, people still spend more than $80 billion on lottery tickets every year. This money could be better spent on building an emergency fund or paying off credit card debt.

A second argument focuses on moral grounds. Critics say that lotteries violate the principle of voluntary taxation, since they tend to raise taxes on those who can least afford them. They also argue that lotteries promote gambling and prey on the illusory hopes of the poor.

In general, there is little agreement about whether the state should be involved in promoting and running lotteries. Yet, since New Hampshire established the modern era of lotteries in 1964, virtually all states have followed a similar pattern: they legislate a state lottery monopoly; establish a state agency or public corporation to run the lottery (as opposed to licensing private companies for the job); start operations with a modest number of relatively simple games; and then progressively expand them.