About Lottery
Lotteries provide people with a chance to win large sums of money for a relatively small investment. They can also be a source of charitable donations. Some states even allocate a portion of lottery revenue to specific programs. But what are the social implications of this form of gambling? And is it appropriate for state governments to run lotteries, which promote gambling and raise funds at cross-purposes with other public policy goals?
Since the 1960s, nearly every state has established a lottery. The patterns are strikingly similar: the government legislates a monopoly for itself; establishes a public agency or corporation to manage operations (instead of licensing a private firm in exchange for a cut of profits); begins with a modest number of games and then, driven by pressure to increase revenues, continually expands the variety of available offerings.
During the anti-tax era of the post-World War II period, many state officials promoted lotteries as sources of “painless” revenue. They argued that the public would voluntarily spend their money for the benefit of state government and that lotteries were a good alternative to raising taxes or cutting other services. Studies, however, have shown that the popularity of a lottery is not correlated with a state’s actual financial condition.
While the majority of lottery proceeds are paid out as prizes, administrators retain a share for operational expenses and to fund gambling addiction treatment programs, among other purposes. In addition, most states also use a share to finance a general pot of money for education, which is typically distributed on a per-student basis.