The Controversy of the Lottery
The lottery is a game in which participants pay for a chance to win a prize, which can be cash or goods. The prize is chosen by lot, a random process that can be conducted either by human or computer. The winner receives the amount remaining after all expenses and profits have been deducted. A number of states have state-sponsored lotteries, which raise billions in revenues each year. The word lottery is derived from the Dutch noun lot, meaning fate. The casting of lots to determine distributions has a long history, going back centuries. The Old Testament instructs Moses to take a census of Israel and distribute land by lot, and Roman emperors gave away property and slaves by lottery.
Lotteries were introduced to the United States in the 18th and 19th centuries, when the country’s banking and taxation systems were being developed and states needed easy ways to quickly raise funds for public purposes. Lotteries gained popularity because they offered painless taxation, were easily organized, and offered a variety of prizes for participants, including the possibility to win large sums of money.
Despite the widespread use of state-sponsored lotteries, there are still a variety of opinions about their desirability. Some states prohibit them altogether, while others endorse them and regulate their operations. A major controversy revolves around the effect of state lotteries on lower-income people. The evidence suggests that people in low-income neighborhoods participate in state lotteries at much lower rates than do those in higher income areas. This creates a regressive impact, in which the rich benefit from the lottery more than the poor do.
Another controversial aspect of state lotteries involves the way that people who play are selected. Many critics charge that the selection process is not unbiased. They argue that state-sponsored lotteries draw heavily from convenience stores, where people buy tickets; suppliers of the lottery (who frequently make large contributions to state political campaigns); teachers (in states in which lottery revenues are earmarked for education); and other groups that may have a vested interest in state policy. In addition, they point out that state-sponsored lotteries are a form of gambling, and thus should be banned.
While these criticisms have merit, they are not the whole story. The fact is that state-sponsored lotteries have a wide base of support. The vast majority of people in states that have lotteries report playing them at least occasionally. The vast majority of these play for fun, rather than with the hope of winning big. While they might not be a perfect solution to the problems of compulsive gambling and income inequality, lotteries have been an important part of state funding for decades. And they will probably continue to be so for the foreseeable future. – This article is part of our series on the economics of gambling. Read the full series here. HarperCollins Publishers Ltd 2014. All rights reserved. Reproduction without permission is prohibited except as otherwise expressly permitted by law.