Rethinking the Role of Lotteries in Society

Rethinking the Role of Lotteries in Society

A lottery is a game of chance in which tickets are sold and prizes (typically money) are given away by drawing at random. Lotteries are widely used in the United States to raise money for state governments, charities, and other public uses. They have been popular in Europe for centuries. The word “lottery” derives from the Dutch noun lót, meaning fate or fortune.

People in the United States spent about $100 billion on lottery tickets in 2021. Many states promote the games as a way to get needed revenue without raising taxes. But how meaningful that revenue is in broader state budgets, and whether it’s worth the costs to people who lose their money, is debatable.

In the years after World War II, state governments adopted lotteries to fund new social safety net programs and other government services. Proponents argued that the games offered an opportunity to expand services without dramatically increasing or cutting taxes on the middle and working classes.

But the reality of state lotteries has turned out to be very different. Despite the resounding public approval that they win, they don’t seem to improve government finances much. They have been able to garner support only because they are sold as a source of painless taxation—with the proceeds going to a good cause, and with players voluntarily spending their own money rather than being forced to do so.

The success of lottery games depends on how big their jackpots are, which are largely driven by the amount of advertising they receive and by the number of tickets sold. Super-sized jackpots generate huge public interest and draw lots of ticket buyers. Then, when the prize carries over into the next drawing, they create a heightened sense of urgency to buy tickets. But that only works if the jackpots keep rising, and in many cases they don’t.

As a result, the games often end up being financially unsustainable. While the proceeds from a lotto ticket are supposed to be distributed evenly among the winners, the truth is that the winnings are more heavily concentrated in the hands of those who are most likely to play—and buy the most tickets. The majority of lottery players are from middle-income neighborhoods, and less proportionally from low-income areas.

A rethinking of the role of lotteries in society is long overdue. They may be a necessary tool in times of crisis, but they shouldn’t be used to replace more efficient and fairer ways of raising needed revenue. Instead, state policymakers should focus on reducing income inequality and building better public services for all. That will make the lotteries more fair, and help taxpayers avoid the misery that inevitably comes when they spend their money on a chance for the future.