The Silver Lining of the Lottery

In the US, state-run lotteries make up a big chunk of many states’ general revenue. But the way these gambling machines have evolved over time has created a series of problems. First, they have eroded public morale. By promoting games that appeal to the most desperate gamblers, state lotteries have encouraged a class of people who might not otherwise participate in government-sponsored gambling to gamble with their tax dollars. The problem is that these gamblers don’t always get a good deal from their participation. In fact, the vast majority of lottery participants do not win.

Second, lottery games have eroded the quality of public services. The money raised from these games has not necessarily improved a state’s finances or its educational performance. Rather, it has often diverted funds from other programs that have much more important impacts on public well-being.

This dynamic has given rise to a peculiar form of government corruption. It’s called “revenue-driven governance,” and it has become the dominant political model in America. State legislators have a strong incentive to approve lotteries, especially when they face budget crises and need to raise taxes or cut other public programs. And once a state’s lotteries are established, they tend to become self-perpetuating and inflexible: as revenues grow, legislators feel pressured to increase the size and scope of the lottery.

These developments have led to a peculiar form of government: one that’s run primarily by consultants, lobbyists and political insiders. As a result, state officials have largely lost touch with the broader public. Lottery decisions are made piecemeal and incrementally, without the benefit of a broad policy overview. Moreover, the lottery’s popularity is often independent of the actual fiscal circumstances of state governments.

As the lottery’s popularity has grown, so too have state-sponsored gambling’s problems. But there’s a silver lining: it may be the catalyst for a major change in how we think about gambling.

A lottery is a type of competition in which the prizes are assigned by chance. The first such competitions date back to the 15th century, according to records from Bruges and other towns in the Low Countries. They were used to raise money for town walls and for charity.

Most lotteries now offer players the option of leaving their numbers to a computer instead of choosing them themselves. By doing so, they accept whatever combination of numbers comes up—no matter how unlikely. This “expected value” statistic has become the prevailing mantra in lottery criticism, but it’s a dangerous simplification. It distorts the multifaceted lottery experience into a single, simplistic number, and it misleads the Educated Fool. This rare creature, who is a treat for gambling anthropologists like me, mistakes partial truth for total wisdom. He or she mistakenly believes that the lottery’s expected value will make it a wise investment. That’s a mistake that most other fools won’t make. They’ll see what’s really on the line and play smarter. Then they’ll have a better shot at winning.