Public Policy and the Lottery

The lottery is a classic case of public policy developed piecemeal and incrementally, with very little overall oversight. Consequently, the lottery is often run at cross-purposes with other state functions and government interests. Its growth has been highly dependent on advertising, focusing heavily on persuading convenience store operators to sell tickets; lottery suppliers (heavy contributions from such companies to state political campaigns are widely reported); teachers (in states where the revenue is earmarked for education); and the general public at large, who buy tickets regularly and spend billions in tax dollars that could be better invested in other ways.

People play the lottery because they see it as a low-risk investment with a high chance of considerable gain. But in reality, the risk-to-reward ratio is much less attractive, and lottery players as a group contribute billions in government revenues that could be used to finance other social needs. Lottery players as a group also forgo the opportunity to save for retirement or college tuition, which is a high-risk investment with a lower probability of significant gain.

The first recorded lotteries, offering tickets with a prize of money, appeared in the Low Countries in the 15th century, raising funds for town fortifications and helping the poor. They became especially popular in colonial America, where they were used to fund public projects such as paving streets, building wharves, and constructing churches, libraries, canals, colleges, and bridges. Moreover, lotteries have consistently won broad public approval regardless of the actual fiscal circumstances of the state government, which suggests that their popularity is not simply a function of an effective marketing strategy.

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