Public Policy and the Lottery

A lottery is a method of drawing lots to determine the winners of prizes. The practice is common in sporting events, but it also occurs in other ways, including in business transactions and public policy. For example, a lottery may be used to distribute subsidized housing units or kindergarten placements.

Historically, lotteries have been considered a relatively painless form of taxation. In the early days of state-run lotteries, lawmakers justified their establishment by arguing that players were voluntarily spending their own money for the benefit of the general public. In fact, however, a lottery is a classic case of public policy being made piecemeal and incrementally, with little or no overall overview. Moreover, the evolution of lottery systems is often driven by revenue pressures rather than by any clear policy objectives.

In modern times, state lotteries generally operate as commercial businesses with a focus on maximizing revenues. They begin operations with a modest number of games and, due to demand, rapidly expand the portfolio of offerings. This expansion is fueled in large part by extensive promotional campaigns that emphasize the likelihood of winning (often using misleading information). Moreover, the revenue from a lottery is a form of gambling revenue.

The result is that a lottery becomes a major source of gambling activity, with the public becoming accustomed to paying for a chance to win money. Lottery officials are largely immune to political pressures to limit their activities because they are constantly seeking new games and promotions to keep revenues rising.