The Lottery and Its Critics


The lottery is a form of gambling in which numbers are drawn to win a prize. It has been popular throughout history, and it is now available in most states in the United States. The first lotteries were probably organized in the Low Countries in the 15th century for a variety of purposes, including providing funds to help the poor. The word “lottery” is derived from the Dutch noun lot (“fate”), and it was used in English by 1612. Lotteries played an important role in the colonial era of the United States, with George Washington sponsoring one in 1768 to finance road construction.

Many state governments adopt a lottery to raise money for public uses, such as education. The popularity of the lottery rises during times of economic stress, because people view it as a painless alternative to raising taxes or cutting government programs. This argument has proven persuasive, and the lottery is now a common feature of American life.

As the lottery becomes more common, critics have focused on specific features of the operation. They have pointed to problems such as the high incidence of compulsive gambling and its alleged regressive effect on lower-income groups. These concerns have served to shift the focus of discussion from the desirability of a lottery in general to more specific aspects of its operations and the way those operations are structured.

In most states, the state government acts as a monopoly and controls the lottery operation. It establishes a state agency or public corporation to run the lottery (as opposed to licensing a private firm in return for a share of the profits). The lottery begins with a modest number of relatively simple games and, due to constant pressure for additional revenues, gradually expands its offerings.

A common criticism is that the lottery violates morality by encouraging risk-taking behavior and rewarding it. This charge is often made by religious leaders, but there is also a practical concern that the lottery undermines moral values and contributes to the rising prevalence of problem gambling.

The purchase of lottery tickets cannot be accounted for by decision models that are based on expected value maximization. This is because the ticket costs more than the expected gain, and so a person who maximizes expected value would not buy a lottery ticket. Nonetheless, more general models that incorporate the curvature of utility functions can account for lottery purchases.

State lottery profits are allocated to a variety of beneficiaries, such as education, health care, and social welfare. Table 7.2 shows the cumulative allocation of lottery profits by state from inception through June 2006.