Is Running a Lottery a Good Use of State Power?
The lottery is a form of gambling in which people pay a small amount of money (usually a dollar or two) for a chance to win a larger sum of money. It is a popular method for raising funds for public projects, including education. Some states have even adopted the practice as their main source of income. But is promoting gambling a good use of state power? And is running a lottery a wise decision in a time when many families are struggling to make ends meet?
In order to succeed, lottery organizers must appeal to the public’s basic human impulses to gamble. To that end, they promote the large size of prizes and dangle the possibility of instant riches in front of people’s faces. In addition, they target specific demographic groups that are most likely to play: convenience store owners; lottery suppliers who donate heavily to state political campaigns; teachers in states where lotto proceeds are earmarked for education; and so on.
The result is that many people who play the lottery do so despite being aware of the long odds against winning. Indeed, research shows that lottery participation decreases with age and income. In addition, the prizes are often paid out in a way that diminishes their current value: the winner is usually required to take a percentage of the prize in regular payments over 20 years, with inflation and taxes dramatically eroding the actual value.
To make up for these shortcomings, lotteries advertise heavily and create complex marketing systems. They also hire lobbyists to influence state legislatures and educate school board members about the benefits of a lottery, a practice that has contributed to the proliferation of state lotteries. The result is a system in which the public’s basic impulse to gamble is stimulated while state government’s fiscal health suffers.
State lotteries have become a classic example of government policy made piecemeal and incrementally, with little or no overall direction. The basic formula is as follows: a state adopts the lottery, establishes a state agency or public corporation to run it (as opposed to licensing a private firm in return for a share of the profits), launches with a modest number of relatively simple games, and then expands in response to constant pressure to raise revenues.
The reason for the expansion is that when the lottery is successful, it generates a substantial amount of “painless” revenue, money from players who spend their own money voluntarily in exchange for a small chance at winning a big prize. This is a major selling point for the lottery, as it allows politicians to claim that they are raising money without having to raise taxes or cut programs. The success of the lottery in this regard is a major factor in its popularity, and it has helped to sustain the political support for it in all states where it has been adopted.