The Politics of the Lottery


In the United States, people spent upwards of $100 billion on lottery tickets in 2021, making it the most popular form of gambling in the country. Many state lotteries promote their games by claiming that they help raise revenue for education or other worthwhile purposes, but how much this money is actually worth and what the trade-offs are to those who gamble are issues that deserve more scrutiny.

Lotteries are a classic example of the way in which public policy is shaped by the political process. Politicians view lotteries as a source of painless revenue, and voters see them as a chance to win free stuff. The result is that the state’s lottery policies are often at cross-purposes with the general welfare.

The casting of lots for prizes has a long history, going back at least to the Roman Empire, when it was used as a party game during the Saturnalian festivities. In Europe, the first recorded public lotteries that sold tickets with a prize in the form of money were held in the Low Countries in the 15th century, to raise funds for town repairs or help the poor. Benjamin Franklin organized a lottery to raise money for cannons to defend Philadelphia during the American Revolution, and George Washington held one in 1768 to build a road across the Blue Ridge Mountains (the rare ticket bearing his signature is now a collector’s item).

But lottery tickets do not satisfy decision models based on expected value maximization, as their purchase represents an excessive risk. Moreover, they can appeal to irrational motives like thrill-seeking and fantasy fulfillment. More general utility functions that incorporate things other than the lottery prizes can also explain why people buy tickets, but they are a minor factor in most cases.

Most modern lotteries are essentially commercial operations. Their advertising strategies are designed to persuade people to spend their hard-earned dollars on a hopeless endeavor. These strategies can be misleading, by presenting odds that are inflated or falsely implying that a certain number of tickets will yield a particular amount of money. They can even encourage irrational gambling behavior by promoting ideas like the “lucky numbers” and by equating playing the lottery with a “game of skill.”

In addition, lotteries tend to be heavily marketed in lower-income neighborhoods. Consequently, people in these communities play the lottery at higher rates than their percentage of the population, and they generate greater revenues for the state. This skews the state’s tax base, and it is important to consider whether the additional revenue generated by these activities is worth the potential harms that may come with them. The fact that lotteries have evolved into such commercial enterprises has also contributed to the problems outlined above. This is a classic case of government agencies running at cross-purposes with the interests of their customers, and it’s time for an overhaul.