Lottery, in its broadest sense, refers to any arrangement where prizes are allocated by chance. Historically, this has meant drawing lots to determine ownership of property or other rights, but it also means awarding prizes in the form of cash, goods, services, or even lives. In the modern era, state-sponsored lotteries are commonplace and highly popular. Despite their popularity, however, they have been subject to many criticisms. They are accused of promoting addictive gambling behavior, are seen as a major regressive tax on lower income groups, and are often considered to violate the state’s duty to protect its citizens from excessive risk.
Despite these criticisms, lottery officials have been able to keep their monopoly status by maintaining the support of various constituencies. These include convenience store operators (who have a large share of lottery profits); lottery suppliers, which contribute heavily to state political campaigns; teachers (in states where lottery revenues are earmarked for education); and state legislators, who become accustomed to the steady flow of revenue.
While there is no question that state-sponsored lotteries are popular, it is important to understand their origins and the forces driving them. In many ways, they are the perfect example of a classic public policy based on piecemeal and incremental decision making with little overall overview or consideration of the general welfare. State officials make decisions about the number of games, rules, and other details of the lottery on an ad hoc basis with little or no overall vision in mind. This has led to a proliferation of lotteries with little or no consistency among them, and it is difficult for a state to develop a coherent “gambling policy” or even a lottery policy because such policies would have to be adopted in each jurisdiction separately.
In addition, the state’s interest in generating new revenue is powerful enough to overcome the objections of many people who believe that lotteries are immoral or at least unjust. This is particularly true when the lottery is perceived as being a good way for the state to raise funds for its programs, such as education.
The most glaring flaw in this argument, however, is that the state’s interest in raising money through a lottery is not always consistent with its actual fiscal health. The fact is that, in general, lottery sales rise when the state’s budget is under stress and decline when it is not. As a result, the overall fiscal impact of the lottery can be difficult to gauge, and it is also difficult for the public to understand the real benefits that are derived from its operation.