Public Benefits and the Lottery


The lottery is a fixture of American society, with people spending billions on tickets every year. Many states promote the lottery as a source of “painless” revenue, and argue that it helps to support public services such as education. But just how meaningful that revenue is, and whether it is worth the trade-offs of people losing money to play it, are contested.

Lotteries have a long history, dating back to ancient times. The Old Testament has several passages that describe the distribution of land and other property by lot; and the Roman emperors used a lottery to give away slaves during Saturnalian feasts. But the use of lotteries to distribute prize money is comparatively modern. Francis I of France introduced them in the 1500s and they became a popular form of raising public funds.

Despite their popularity, lottery critics point to a number of disturbing facts. They claim that the games promote addictive gambling behavior and that they are a major regressive tax on low-income people. And they say that a state’s decision to adopt a lottery is often driven by the desire for tax revenues rather than its own financial needs.

Lotteries are also criticized for encouraging speculative investments, and they have been linked to rising rates of fraud and bankruptcy. Nevertheless, supporters of the games argue that there is little evidence that their popularity is tied to a state’s fiscal health. As Clotfelter and Cook report, a lottery is usually adopted by a state only when it can be demonstrated that it will increase revenues without forcing the government to raise taxes or cut services.