Public Policy and the Lottery


It is easy to argue that lotteries are good, in the sense that they raise money for state programs. But it is harder to make the case that these are the best way to spend this money. Lottery revenues are a drop in the bucket of overall state revenues, and the reliance on lottery revenue skews public spending decisions.

Lotteries are a classic example of public policy being made piecemeal, and often at cross-purposes to the general public interest. This is especially true when a state adopts a lottery, as it quickly develops extensive specific constituencies: convenience store operators who sell the tickets; lottery suppliers (who contribute heavily to political campaigns); teachers, in states where lottery funds are earmarked for education; and of course state legislators.

In addition, lotteries tend to be regressive in their distribution of players and revenue. The majority of lottery players come from middle-income neighborhoods, with fewer playing from lower-income areas. Moreover, studies have shown that the poor participate in lotteries at rates far below their proportion of the population.

Lottery games are a classic form of gambling that relies on chance. They may be run in a variety of ways, but the core is always the same: the drawing of numbers, with prizes awarded on the basis of chance. Lottery games can have different prize amounts, and can offer either a lump sum or an annuity payment. A lump sum provides immediate cash, while an annuity will provide a steady income over time.