Lottery Revenues and Politics

The lottery is a form of gambling in which numbers are drawn to win a prize. In the United States, state governments run lotteries and use their proceeds to fund public projects and services. The early growth of the lotteries in the post-World War II era was driven by a belief that they could provide essential social safety net services without heavy taxation on the middle and working classes. This is a policy dynamic that has continued to the present.

There are several reasons why the lottery has grown so rapidly in recent decades. First, state governments have been under pressure to expand their array of public services and are facing a declining revenue base. Lottery revenues are a relatively painless way for states to increase spending while still maintaining fiscal discipline.

Second, there is a growing sense among many citizens that the government needs to be doing more for the poor and middle class. Providing basic health care, education, and welfare services is often not affordable without some additional revenue sources. The lottery, with its promise of a windfall jackpot, is one way for the citizenry to help the government fulfill this perceived need.

Lottery revenues are also attractive to politicians because they are based on voluntary spending by citizens rather than a forced taxation of the general population. As a result, politicians are eager to endorse and expand lotteries when they are offered.

In the United States, there are forty-four states that run lotteries and the District of Columbia. The majority of these have monopoly status and do not allow other lotteries to operate within their borders. Most states promote their lotteries by running television and radio advertisements. In addition, the state governments have a variety of online marketing strategies.

The vast majority of lottery ticket sales are derived from retail outlets, and the vast majority of these retailers are independent, privately owned businesses. Retailers include convenience stores, drugstores, supermarkets, service stations, bars and restaurants, bowling alleys, and newsstands. According to the National Association of State Lottery Directors (NASPL), approximately 186,000 retailers sold lottery tickets in 2003.

While some people enjoy playing the lottery, most do so only occasionally or with some level of skepticism. A skeptic may point out that, as with all other games of chance, the odds are long against winning. However, there is a psychological component to lottery play, with some players feeling that a sliver of hope—even if remote—is the only way they can get out of a tough situation.

The fact that the lottery is a business with a focus on increasing revenue means that its advertising necessarily must emphasize the likelihood of winning. There is debate about whether this promotion of gambling is at cross-purposes with the general welfare, and especially when it comes to the poor and problem gamblers. Despite these concerns, few states have a comprehensive “gambling policy.” Instead, authority for lottery operations is fragmented between the legislative and executive branches of government and even within each branch, so that the general welfare can be taken into consideration only intermittently.