The practice of determining fates and property distributions by lot has a long history. Moses was instructed to divide land among Israelites by lot, and Roman emperors used it to give away slaves. The first lottery to award money, however, was not until the 15th century in the Low Countries, where towns held public lotteries for municipal repairs and assistance to poor residents.
The state’s need for revenue compelled it to enact the lottery. But in promoting the game, it’s creating generations of gamblers and perpetuating the illusion that the odds are stacked against anyone but the most gifted and lucky.
A lottery’s initial appeal is rooted in its improbability, a belief that there’s a slim sliver of hope that we all have it in us to win big someday. In addition, lottery advertising is aimed at the most receptive demographic: people with disposable incomes. That’s a big reason why lottery ads are so ubiquitous and so persuasive, as well as why the odds of winning are so much lower than we might think.
State lottery officials often argue that their operations are “good for the public” because they promote financial literacy and discourage problem gambling. They also point out that state lotteries generate revenues in addition to their prize pools, and those funds are allocated according to each state’s needs. The reality is that the majority of lottery revenue goes to prizes and other expenses, such as operating costs, retailer commissions, and gaming contractor fees. Only a little over 10% is left over for other state-designated projects.
Nevertheless, research shows that state lotteries do not necessarily correlate with a state’s fiscal health, as measured by measures like unemployment and the rate of state debt. In fact, states have largely been able to continue running lotteries even during periods of economic stress. The underlying problem is that, in the process of running lotteries, states create a dependency on revenue they can’t control and that ultimately works against the state’s broader interests.
Lottery officials argue that the popularity of their games is tied to their role as “educational” institutions, a claim that is unfounded. Lottery advertising is primarily directed at generating revenue, and educational benefits are a secondary consideration. Moreover, research shows that the public has no particular preference for how lottery proceeds are spent.
The truth is that most states’ lotteries are little more than a state-run gambling enterprise. It’s time to reconsider whether that is an appropriate function for the government, especially in this era of inequality and limited social mobility. State governments should focus on ensuring that their gambling policies don’t negatively impact the poor, children, or others in ways they can’t easily control or address. That’s a far more important goal than attempting to capture some inextricable human impulse to gamble.