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The word lottery is an English variant of the French noun lotte, meaning “drawing lots.” The first state-sanctioned lottery was held in New Hampshire in 1964. The success of this venture inspired more than 20 other states to introduce their own versions. Today, 48 states and the District of Columbia operate lotteries. Despite the wide variety of lotteries, they share many similarities: each legislates a legal monopoly for itself; establishes a public agency or corporation to administer its operations (as opposed to licensing a private firm in return for a percentage of profits); begins with a modest number of relatively simple games; and, due to ongoing pressure to generate revenues, progressively expands its offerings, introducing new types of games and more complex strategies.
State officials largely make their policy decisions piecemeal, with little overall oversight and almost no coordination with one another. The result is that, as in other gambling industries, lottery officials are often able to capture enormous profits without having to do much work. Moreover, even when money from the lottery is “earmarked” for a particular purpose, such as public education, the legislature retains the right to reduce the appropriations it would otherwise allot to the program from its general fund.
In addition to its inherent reliance on chance, the lottery has become notorious for its role in fueling gambling addiction and encouraging reckless behaviors. Lottery officials aren’t above using psychological tricks, from the design of the fronts of lottery tickets to the math behind their odds of winning, to keep people coming back for more. This is not inherently different from the tactics of tobacco companies or video-game manufacturers, but it is unusual for such strategies to be adopted by a government agency.
Despite the risks, lottery advocates argue that it is necessary to finance state services, and some even suggest that its existence is inevitable. They argue that gamblers will always play, so the state might as well benefit from their actions. This line of reasoning is flawed in a number of ways. First, it fails to consider the fact that gambling taxes are still a small portion of state budgets. Second, it ignores the fact that lottery games are inherently addictive, and that by promoting them, the state is creating a new generation of gamblers. In the end, it is difficult to see how the benefits of a lottery can outweigh the costs. A rethink is long overdue.