The Darker Side of the Lottery


Lottery is an enormous business that raises a lot of money for states. Its success is largely due to two things: the fact that people like gambling and state politicians love it as a painless source of revenue. But there’s a much darker side to this business, and it’s one that lottery officials are largely unaware of.

Lotteries sell a fanciful fantasy that the chances of winning are very small but there’s always some glimmer of hope. It’s a dangerous message. It’s a deceptive sales technique that appeals to compulsive gamblers and leads them to spend more than they should. And it preys on the illusory hopes of poor and working-class citizens.

The basic premise is that you pay some amount of money in exchange for a chance to win a prize, which could be anything from cash to jewelry to a new car. Federal law defines a lottery as an activity whereby consideration (money), chance, and a prize are present. It is also illegal to promote a lottery by mail or telephone, and it’s against the law to transport or ship tickets between states.

Despite this, most states have lotteries. In some cases, the state government runs them and in others the lottery is operated by a private corporation that contracts with the state to run it. State governments use the money raised by the lotteries for public works projects and a variety of other purposes.

Some critics of the lottery argue that it is a form of hidden taxation and hurts those who can’t afford to play. They point out that the money won in a lottery is often paid out in equal annual installments over 20 years, which means that inflation and taxes dramatically reduce its current value. And they say that a lottery is regressive because it disproportionately affects poor and working-class people.

It’s hard to argue against the logic of that argument. But the truth is that most lottery players aren’t irrational gamblers. They’re just doing what people do: They want to feel better about their lives and they believe that there is a chance, however minuscule, that they will win the big jackpot.

Lotteries are a classic example of public policy that is made piecemeal and incrementally, with little or no overall policy direction. This is a problem for all forms of gambling, but it’s particularly acute with lotteries. Lottery officials don’t take a broad view of the public interest and they end up creating policies that are difficult to change. This is especially true when the officials are elected rather than appointed. It’s almost impossible for a state to have a coherent gaming or lottery policy, and most officials have very little control over the overall evolution of the industry. So, while the initial decisions they make have some influence, those decisions are quickly overtaken by the continuing evolution of the industry. And that’s where the real danger lies.