In a time when many states are struggling to raise revenue, the lottery seems like an appealing option. It’s low cost, easy to organize and popular with the public. But there are some serious questions about lotteries and whether they should be allowed at all.
Since the beginning of modern state governments, almost all lotteries have followed a similar pattern. The public is asked to approve the idea through a referendum, and the state legislature then authorizes the creation of a lottery. The arguments for and against the lottery are remarkably similar, as are the arguments about how the lottery is to be structured and operated.
Once the state-run lottery is established, it typically begins operations with a modest number of relatively simple games. Then, due to constant pressure for additional revenues, it progressively expands its portfolio of games and its operations. This process has been repeated countless times in different states, and the result is that most state lotteries now have a wide variety of games that are offered to players.
But while state lotteries are often able to grow in size and complexity, they are rarely able to increase their overall contribution to the state’s coffers. Instead, they tend to create dependency and reliance on revenues that can be difficult to disentangle.
The origins of lotteries date back centuries. The Old Testament has Moses instructing the people of Israel to divide land by lots, and Roman emperors frequently gave away property and slaves through lotteries during Saturnalian feasts. Benjamin Franklin organized a lottery to raise money for the defense of Philadelphia, and George Washington managed a lottery that advertised slaves and land as prizes in the Virginia Gazette.
Nevertheless, there’s no doubt that lotteries appeal to human greed and irrational gambling behavior. Even so, they’re not all bad: if they’re used to help the poor or the elderly, for example, they can have a real positive impact on those groups. But if they’re marketed as a chance to win big, the irrationality of gambling becomes more apparent than ever.
In some states, the lottery has been a way for politicians to increase spending without having to raise taxes on working and middle-class citizens. That arrangement worked well for a while, but now states are finding that they need more revenue than the lotteries can provide. This is leading to a rethinking of state policy and a growing sense of urgency for lawmakers.
In the long run, though, the lottery is unlikely to solve all of the problems facing state governments. The state’s financial situation is too complex and intertwined with the national picture for any single approach to be successful. But as states look for new sources of revenue, they should be careful to avoid the same mistakes that were made in the past. They should consider a holistic, rather than piecemeal, approach to solving their fiscal challenges and taking into account the long-term consequences of lottery policy.