The Lottery tells a fascinating story of the emergence of state-sponsored gambling. In the immediate post-World War II period, governments were able to expand their array of services without having to raise taxes on middle- and working-class citizens. Instead, they turned to the lottery: a popular form of gambling that appeals to people’s natural desire to dream big, even though winning a large jackpot is very unlikely.
A classic example of public policy being made piecemeal and incrementally, the creation of the first modern state lotteries follows remarkably similar patterns: a government establishes a state-controlled monopoly, typically by establishing a publicly owned corporation that manages the lottery. It begins with a small number of relatively simple games and, under pressure to increase revenues, slowly — sometimes rapidly — expands its operations. This expansion often takes the form of adding new games to the existing portfolio, but it also can take the form of expanding the scope of activities that are authorized to be offered through the lottery.
Most states adopt a lottery as a way to generate revenue for public programs, such as education or veteran’s health. These benefits are attractive to politicians because they can be offered without raising taxes, making them a “painless” source of revenue. The dynamics that result are predictable: as the lottery’s revenues grow, pressure builds for more spending, and legislators and citizens become accustomed to having their money provided to them for free by the state.
The problem is that this dynamic creates an unsustainable situation. As the amount of money available through the lottery grows, it becomes easier to convince people that they will win big and get rich quickly if only they purchase more tickets. In addition, the disproportionately low odds of winning a large prize entice lower-income citizens to spend a greater proportion of their incomes on tickets, and this can lead to serious financial problems, even if they do not win.
This dynamic is particularly apparent in the case of keno, a game that has grown rapidly in popularity among some lottery players. The rapid rise of keno’s popularity has coincided with the introduction of other games such as video poker, which offer higher payouts but lower odds of winning. In the long run, this will likely lead to a decline in revenues from traditional games and the need for additional advertising.
Despite these potential problems, state lotteries remain hugely popular and have been successful in raising substantial amounts of money for public programs. The question is whether this success will continue in the face of increasing public aversion to gambling and the growing recognition of the harms that it can cause. In order to avoid a reversal in this trend, lottery officials should focus on two key messages: (1) Lottery is fun and (2) Play responsibly. If they can communicate these messages effectively, it will be possible to sustain a profitable and responsible lottery that can continue to provide valuable public benefits.