The Public Interest and Lottery

Lottery is a form of gambling in which tickets are sold for chances to win a prize. In the modern sense, the word refers to state-sponsored games where money is awarded based on the result of a drawing of numbers or symbols. Prizes may be cash or merchandise. State-sponsored lotteries are usually regulated by government authorities. Unlike other forms of gambling, such as casinos or sports betting, the proceeds of state lotteries are generally earmarked for public purposes, including education and other social services. This has helped lottery revenues to gain broad popular support.

The earliest lotteries were probably conducted in ancient times. A biblical passage has the Lord instructing Moses to divide land by lot (Numbers 26:55–56). Lotteries also were a common dinner entertainment in Roman times, where hosts distributed tickets to guests and held a drawing for prizes during Saturnalian feasts. The first European lotteries to offer prize money in the modern sense began in the 15th century, when towns gathered to raise funds for town fortifications and help the poor.

By the end of the Revolutionary War, states had adopted lotteries as a way to raise money for the military and other state purposes. The popularity of these lotteries stemmed from the widespread belief that people would be willing to hazard trifling sums for the opportunity to acquire considerable wealth. The fact that such wagers were made without any direct taxation was attractive to many people in a period when taxes were not seen as especially fair or equitable.

In general, state-sponsored lotteries follow a similar pattern: a state establishes a monopoly for itself or a state agency to run the lottery; begins operations with a modest number of relatively simple games; and, under pressure from the need to increase profits, progressively expands the variety of available games.

The question is whether such an arrangement serves the public interest. Regardless of whether lottery proceeds are earmarked for particular public purposes, the state’s promotion of gambling can have negative consequences for the poor and problem gamblers. Furthermore, state officials are at risk of focusing too much on the need to maximize lottery revenues and losing sight of other important goals such as maintaining adequate public services and protecting taxpayers from excessive taxation. State legislatures and governors should carefully weigh these issues before approving a new type of gambling. If they fail to do so, a costly mistake could be made. The writer is a senior analyst at the Mercatus Center at George Mason University. He is the author of numerous books and articles on public policy topics, including welfare reform and public pensions. His latest book, “The State of the American Lottery,” was published in June 2014 by Houghton Mifflin Harcourt. His e-mail is