Public Policy and the Lottery


A lottery is a form of gambling wherein people purchase tickets for a chance to win a prize. It has a long history in the United States and throughout many other parts of the world. Generally, winners are selected through a random drawing. The prizes can range from cash to goods. In some cases, the prizes can be very large. Some people use the money from winning a lottery to pay for things like a new car or a house. Others use it to supplement their income. The practice is legal in most states.

Lotteries are a classic example of a public policy that begins well-intentioned but becomes bogged down in the details. Once launched, they quickly develop specific constituencies: convenience store operators (who usually serve as vendors); lottery suppliers (heavy contributions by them to state political campaigns are routinely reported); teachers (in those states in which the revenues from the lottery are earmarked for education); and, of course, the state legislators themselves, who often become accustomed to a steady stream of extra revenue.

The success of a lottery depends on its ability to convince people that the proceeds are used for a particular public good. In some cases, such as when a state faces an economic crisis, the argument is especially powerful; people see lottery revenues as a way to avoid tax increases or cutbacks in essential services. But the evidence suggests that this is only sometimes true. Studies show that the popularity of a lottery is not necessarily tied to a state’s fiscal health.

Lottery games are also subject to the same sorts of behavioral economic problems as other forms of gambling. In some cases, the cost of a ticket may be so high that it actually decreases an individual’s overall utility. In other cases, the disutility of a monetary loss may be outweighed by the expected entertainment value or other non-monetary benefits of playing.

Lotteries have traditionally been a popular way to raise money for public works projects, such as road construction and canal building. They are also frequently used to fund private projects such as colleges and universities. Benjamin Franklin attempted to organize a lottery in 1776 to raise money for cannons to defend Philadelphia from the British during the American Revolution, but it failed. Lotteries have continued to be popular in America, and are now a major source of funding for state and local government projects. They are also a popular source of funds for charities and church programs.