A Closer Look at Lottery

Lottery is a form of gambling in which numbers or symbols are drawn at random to determine a prize. Prizes may range from a small cash sum to an apartment in a new building, or even a sports team. Although making decisions or determining fate by casting lots has a long history (including several instances in the Bible), public lotteries are of more recent origin, having been introduced to Europe by French colonists in the 17th century. These were originally hailed as painless forms of taxation and raised money for a wide variety of purposes, from town fortifications to helping the poor.

While state lotteries do indeed raise a great deal of money for the states, most of this money is spent on administration, advertising, and prize payments, with relatively little left over for the actual state programs to which the funds will be allocated. This fact is not lost on the many critics of lottery, who contend that it promotes addictive gambling behavior, imposes a large, regressive tax burden on lower-income groups, and undermines family stability.

However, a closer look at the way that state lotteries are adopted and operated suggests that they do not necessarily have these negative consequences. Historically, lotteries have enjoyed broad popular support because they are perceived to benefit a specific public good, such as education. As Clotfelter and Cook show, this perception does not seem to depend on the objective fiscal condition of the state government, as lotteries win broad support even when the state government is in good financial health.