Lottery is a popular pastime, and it’s one that many people play regularly. It is easy to see why: it offers a chance to fantasize about winning a fortune at a cost of a few bucks. For some, it can be a way to alleviate financial pressures or a source of hope that a bad situation will turn around for the better. For others, however, it can be a serious budget drain. Numerous studies have shown that people with low incomes participate in lotteries disproportionately, and they spend far more than their percentage of the population’s total expenditures on lottery tickets.
In the US, public lotteries have been a popular source of revenue for state and local projects since colonial times. Benjamin Franklin sponsored a lottery in 1776 to raise money for cannons to defend Philadelphia against the British, and Thomas Jefferson sought permission to hold a lottery to help him pay off his enormous debts. Today’s public lotteries typically offer a large prize (typically a lump sum of cash) along with numerous smaller prizes. Prizes are awarded randomly by drawing a combination of numbers. Most of the time, the prize amounts are predetermined, but some lotteries allow players to select their own numbers and have a chance of a bigger jackpot.
The earliest recorded public lotteries that offered tickets in exchange for the chance to win cash were held in the Low Countries in the 15th century, and it is believed that they were even older. They were primarily used to raise funds for town fortifications, but they also gave assistance to the poor. In the modern era, lotteries have been established in nearly every state. They usually begin with a state monopoly; a state agency or public corporation is established to run the operation; and the number of games and the prize amounts are increased over time.
A primary argument in favor of a state lottery is that it offers governments the opportunity to obtain “painless” revenue: money from a small segment of the public that voluntarily spends its own money, rather than being taxed by state government. This arrangement was attractive during the post-World War II period, when states wanted to expand their social safety nets but didn’t want to impose new taxes on the middle class or working class.
The evolution of state lotteries, though, has been a classic example of policy making at cross-purposes with the general public interest. State officials, focusing on maximizing revenues, often take the interests of specific constituencies into consideration—convenience store owners (who tend to be the lottery’s major vendors); suppliers (heavy contributions to state political campaigns are regularly reported); teachers (in those states where a significant portion of lottery proceeds are earmarked for education); etc. The result is that most, if not all, lotteries have become dependent on the revenues of a very small, special interest group. The question is, will this arrangement continue?