Public Policy and the Lottery

Lotteries are a classic example of public policy decisions that have evolved incrementally, with little or no general overview. They generate revenues that are often a significant portion of state budgets and yet remain insulated from public scrutiny. The lottery has come to be an extremely popular form of gambling, with a large segment of the population playing it. It is also a major source of tax revenue for the state.

People play the lottery because they want to win. The winnings are often a life-changing sum, enough to pay off debt, set up college funds or create an emergency fund, and a crack team of advisors can help manage it all. But there’s another underbelly to this irrational gamble, one that many winners have experienced: sudden wealth is not always the best thing for mental health. And the lottery is a prime vector for that, with its irrational promises of instant riches.

The casting of lots to make decisions and determine fates has a long history in human civilization (there are multiple instances in the Bible). Lotteries that award material prizes, however, are considerably more recent: the first recorded public lottery was organized by Roman Emperor Augustus for municipal repairs in Rome, while the first recorded raffle to distribute prize money occurred in 1466 in Bruges, Belgium.

Modern lottery advertising is geared to enticing potential players with the promise of big jackpots and free publicity on news websites and television. The games’ popularity is driven by the size of those jackpots, which tend to grow to apparently newsworthy amounts more frequently and are promoted in a variety of ways, including through the use of “rolling jackpots.”

While lottery advertising promotes its big prizes and free publicity, it also uses a number of deceptive tactics: presenting misleading odds, inflating the value of prizes (lottery jackpots are usually paid out in annual installments over 20 years, with inflation dramatically eroding the current amount); and misrepresenting how much of lottery revenue actually goes toward the program it claims to support. Critics have also charged that the earmarking of lottery proceeds for specific programs, such as education, simply allows legislators to reduce the amount of appropriations they would otherwise have had to allot from the general fund for those purposes.

Most states have a wide range of lottery programs, with some offering dozens of different games. While the prizes in some of these vary by region, all lottery games share a common deceptive marketing strategy: they all promise to offer winners a new, improved life. The reality, however, is that most winners will not get rich quickly, if at all. Despite the fact that most of the time, no one wins, many people continue to buy tickets because they believe that they will. The fact that the odds of winning are so long just makes the game more tempting. It is an inextricable part of our human urge to take risks.