The Ugly Underbelly of the Lottery


Lottery is a form of gambling, an activity that relies on chance to allocate prizes to one or more people. It is an activity that has a long and complicated history, stretching back to biblical times and including lots for land distribution among the ancient Israelites and Roman emperors giving away property and slaves at Saturnalian feasts. In the modern era, state lotteries are widely accepted and enjoy broad popular support. In fact, no state government has ever abolished its lottery, and its revenues have been a lifeline for many troubled states.

But there is an ugly underbelly to the lottery. It is a form of gambling that skews heavily toward the lower classes, where the percentage of players is far higher than in the middle class or even in the wealthy population. Moreover, the money won by lotteries, especially when winnings are advertised in terms of an annuity or lump sum, is not paid out immediately, but is subject to a variety of withholdings before reaching the winner. As a result, the actual lump sum received is often considerably less than the advertised jackpot.

Despite these issues, the lottery continues to attract a large and growing number of players. Many of these people, particularly those who play for the big games, go into it clear-eyed about their odds of winning. They may have quote-unquote systems, about lucky numbers and stores and the right time of day to buy tickets and so on. But they know that the odds are long and that they will likely lose more than they win, and they are willing to accept that risk for the possibility of a big payout.

As a result, the modern lottery is a highly complex social and economic arrangement, with profound implications for public policy. This article explores some of these implications in the light of a number of recent studies on the social and economic effects of the lottery.

While there are many different ways to organize a lottery, most follow a similar pattern: The state establishes a monopoly and hires an agency or public corporation to run it (as opposed to licensing a private firm in return for a share of profits); starts with a modest number of relatively simple games; and then, under pressure for additional revenue, progressively expands its offerings, particularly by adding new games. In the end, this expansion is driven by the need for more and more money to pay for ever-increasing welfare costs. It is an uneasy and regressive arrangement. But it is a reality that governments of all types are forced to manage. And it is a reality that has been made all the more difficult by the antitax ethos that has taken hold in much of America. Lottery, like most forms of legal gambling, does not bring in enough money to offset these escalating costs. The only way to make up the difference is by increasing the amount of money won by players.