Lottery Policy Considerations


The casting of lots to make decisions and determine fates has a long history in human culture, but lotteries that distribute prize money have only recently become widespread. Generally, a lottery involves a pool of money whose value is increased through the sale of tickets, and the total value of prizes is predetermined by the promoter. All expenses (including profit for the promoter, the costs of promotion, and taxes or other revenue) are deducted from this pool, leaving the remaining prize money.

Lotteries are a popular means for governments to raise funds for everything from public works projects to social safety net programs. They have broad appeal because people are willing to hazard a trifling sum in return for the possibility of considerable gain, and they are not seen as a form of taxation. At the outset of the American Revolution, for example, the Continental Congress voted to hold a lottery to raise money for cannons for the Colonial Army. In the era after World War II, lottery revenues became the major source of state income, and many viewed them as a painless substitute for more onerous taxation.

But while lotteries have broad popularity, they are not without problems. For one thing, they tend to develop extensive, specific constituencies: convenience store owners, who benefit from lottery advertising; suppliers (who are likely to contribute heavily to state political campaigns); teachers (in states where a portion of the revenue is earmarked for education); state legislators, who grow accustomed to the extra revenue; and so on. As a result, lottery policy is typically made piecemeal and incrementally, with the general welfare considered only intermittently.

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