What is a Lottery?
The lottery is an arrangement that involves paying for a chance to win something, usually money or goods. Federal law defines it as “a game of chance or an opportunity to acquire something of value through chance, in which a person gives up consideration for the right to participate.” The term also applies to other arrangements that involve payment and chance, including the selling of tickets by telephone and mail.
The practice of lotteries dates back centuries. The Old Testament instructs Moses to divide the land of Israel by lot; Roman emperors distributed property and slaves through lotteries; and dinner entertainment in ancient Rome involved the distribution of pieces of wood with symbols on them that were drawn for prizes (apophoreta). The first state-based lotteries emerged in the 17th century, and since New Hampshire’s introduction of a state lottery in 1964, the popularity of lotteries has soared.
State lotteries are generally characterized by their broad public approval, a result of the extent to which they are perceived to benefit a specific public good, such as education. Moreover, state lotteries rarely lose popularity, even during times of financial stress, because their revenue streams are relatively secure, in contrast to budgetary demands on state government that may require tax increases or cuts in public programs.
Lottery revenues tend to expand rapidly after the launch of a lottery, but then they typically level off and sometimes decline. To counter this boredom, lottery companies introduce new games to attract and retain customers. However, these innovations often introduce new problems: ambiguous and misleading advertising; overinflated prize amounts (lottery jackpots are calculated by multiplying the total prize pool by a factor that takes into account both inflation and taxes, dramatically inflating its current value); the appearance of games that seem to be designed to be addictive or prone to compulsive gambling; and a proliferation of multi-state lotteries.
For many people, a couple of bucks for a chance to fantasize about a fortune sounds like a bargain. But for those with the lowest incomes, lotteries can become a major budget drain. Numerous studies indicate that lower-income people play the lottery at a much higher rate than other groups. And, since the lottery is primarily a form of gambling, critics argue that it is essentially a disguised tax on the poor.
In addition, the percentage of people who play the lottery decreases with formal education, as does their participation in other types of gambling. These facts are a major reason why the message that state governments rely on in advocating for their lotteries is so flawed. Instead, the states should be emphasizing that, if you are going to gamble anyway, at least you’re doing it for the kids or for your community. That would be a more persuasive argument than telling people to buy a ticket because the state needs the revenue.
