The casting of lots for making decisions and determining fates has a long history, going back at least to the Bible. But in modern times the lottery has become a popular form of gambling, with proceeds used to fund everything from support for senior citizens to environmental protection and construction projects. Lotteries are a controversial form of public funding, but they’re an important part of the state revenue picture. This makes them tempting targets for politicians and their constituents who are concerned about the government’s ability to manage an activity from which it profits.
The primary argument that states use to promote their lotteries is that they’re a source of “painless” revenue, which is supposed to reduce the burden on state taxpayers. But this argument is problematic, and it’s not just because it obscures the regressivity of lotteries. It also misunderstands the role of public policy. It assumes that a lottery is an appropriate substitute for taxes in the first place, and that it’s acceptable to fund such activities from sin tax revenues or income tax revenue. But that’s not a sustainable strategy, and it’s especially flawed when lotteries are promoted as a way to promote a vice that has been linked to addiction and has a disproportionate impact on lower-income communities.
Lottery revenues are volatile, with ticket sales rapidly expanding then leveling off and even declining. So to maintain or increase their revenues, lotteries introduce new games constantly, and the odds of winning are largely fixed by how many tickets are sold. In addition, the size of advertised jackpots is often overstated, whereas the actual prizes are usually smaller and paid out over time in the form of an annuity.
When we talk to lottery players, they’re almost always clear-eyed about the odds. They know that they have a one in 27,925 chance of winning the jackpot. But they play anyway, because the game provides an escapist thrill that’s not available anywhere else. They buy tickets despite the odds, and they spend $50 or $100 a week on them.
They may have irrational beliefs about what types of numbers to choose or what store is lucky for them, but they still buy tickets because it’s their only shot at a better life. And that’s a problem, because it’s the kind of fantasy thinking that can be dangerous in any context.
Moreover, research shows that lottery playing is not a “recreational activity.” People who play the lotto tend to have worse educational and economic outcomes than non-lottery gamblers. And it’s not just that poorer people play more frequently, but that their participation declines with education and income. That’s a serious concern, and it’s a reason why state governments should rethink their sponsorship of lotteries. A better strategy would be to promote alternative forms of revenue, and to focus on helping those who need it most. That’s a goal worth fighting for. And it’s certainly a much better goal than continuing to promote lotteries as the solution for state budget crises.