Public Policy and the Lottery


Lotteries are a popular and legal form of gambling that allows people to win prizes by buying tickets with numbers on them. In most states, lottery proceeds are used to fund things like education, parks and other public services.

In the United States, lottery revenue has a long and important history. In colonial times, many projects such as roads and wharves were financed with money raised by lotteries. In the 18th century, universities such as Princeton and Columbia were financed with lottery money. In the 19th century, lotteries were also used to fund war efforts.

Despite their popularity and their role in financing public works, lotteries were initially viewed as an unpopular tax. However, Alexander Hamilton argued that “The general public will be willing to hazard a trifling sum for the chance of considerable gain,” and that people should not fear taxes as a means of raising funds for the public good.

While the lottery is an attractive means of raising funds, it also raises important questions regarding the role of government at the state level. The lottery industry is a classic case of the separation of authority between the legislative and executive branches, and the ongoing evolution of the industry is often accompanied by little or no public oversight.

The lottery has always won broad public support, even in states with good fiscal health and low rates of taxable income. Consequently, lottery revenues have become an essential source of income for many state governments. Moreover, state politicians are tempted to increase lottery revenue whenever possible, regardless of the state’s budget situation.

Once a state’s lottery is established, the controversy over its operation often shifts from a focus on the general desirability of the program to specific features of its operations, including the potential regressive effects on lower-income groups and the alleged problems with compulsive gamblers. As a result, few states have a coherent “gambling policy.”

Because the operation of a lottery is so complex, state officials cannot afford to make sweeping or comprehensive decisions on the issue. They must often take action piecemeal and incrementally, as lottery officials have done in many cases. This leads to a lack of policy coordination and to an ambiguous dependency on revenues that they may or may not be able to change.