A lottery is a popular and convenient way for governments to raise money. But it’s also a morally troubling form of taxation that preys on the illusory hopes of poor and working class people. In this article, we explore the many problems associated with lotteries and ask whether they are a proper function of government.
A state legislature legislates a lottery; creates a public corporation or agency to run it (instead of licensing a private firm in return for a cut of profits); begins with modest operations, often with just one game; and, due to pressure from players, progressively expands its offerings over time. In the process, a lottery develops its own personality and agenda, often independent of any larger policy considerations. In short, the lottery is a classic example of public policy developed piecemeal and incrementally, with little or no overall direction or scrutiny.
A key reason for lotteries’ popularity is the widespread belief that proceeds go to “a good cause.” And indeed, studies show that the lottery does raise funds for education and other important public services. However, the popularity of the lottery is a lot less connected to a state’s actual financial health than it is to the perceived needs of a particular community. In fact, even when states are financially healthy, lotteries receive strong public approval. The real reason is that people want to believe that someone, someday, will win the big jackpot. And the marketing message of lotteries reinforces that hope, while downplaying the regressive nature of the games and the heavy burden they place on lower-income people.