Public Policy and the Lottery

A competition based on chance in which numbered tickets are sold and prizes are awarded to the holders of numbers drawn at random. Often sponsored by a state or organization as a means of raising funds.

The lottery is a classic example of public policy being made piecemeal and incrementally, with little or no broad overview. When state officials establish a lottery, they legislate a monopoly; set up a state agency or public corporation to run it; start with a limited number of games; and then, as a result of continuous pressure for increased revenues, progressively expand the program.

But this evolution, which is typical of all lotteries, raises serious questions about the proper role of government in promoting gambling. It puts state officials at cross-purposes with the broader public interest, because they are selling an activity that, by its nature, has a negative impact on poor and problem gamblers, even if these effects are minimal.

This issue is especially important now, because states are facing a period of fiscal crisis when their traditional sources of revenue (income and sales taxes) are being squeezed. As a result, they are turning to the lottery for help. The principal argument used in every state to promote its lottery has been that it provides a source of “painless” revenue: people who play the lottery are spending their money voluntarily, and this is a legitimate way to generate revenues for state governments. This approach has proved to be remarkably successful, and it is being adopted in many other countries.