The Lottery – An Appropriate Function For the Government?

Lottery is a low-odds game of chance in which prizes are allocated by random selection. It is a popular form of gambling that encourages people to pay a small sum of money for the opportunity to win a jackpot–often administered by state or national governments. It has a long history, dating to ancient times when Moses used a lottery to distribute land to the Israelites and Roman emperors gave away property and slaves by drawing lots. In modern society, the lottery takes on many forms: the financial kind where people purchase tickets and hope to win a prize; the decision-making sort in which people are randomly selected for positions in a sports team draft or the allocation of scarce medical treatment; and even the distribution of units in subsidized housing or kindergarten placements, as exemplified by an unusually successful Powerball draw last January.

Lotteries have become a significant source of government revenue and, in an anti-tax era, state officials face intense pressure to increase their profits. But promoting an activity with such high odds of success raises two important questions: 1) is this an appropriate function for the government and 2) even if it is, does it have negative consequences for those who do not gamble or do so to escape poverty?

The answers to these questions are complicated. Although state lotteries do provide a modest percentage of their revenues for a variety of programs (e.g., education in California), they also have a regressive impact on lower-income households. Moreover, they are an expensive form of gambling: the average return on a ticket is about 50 cents, and the odds are much worse than those on slot machines in casinos.