Is the Lottery Worth the Social Costs?


The lottery is the most popular form of gambling in America. Each year people spend billions of dollars on tickets, and states reap enormous profits from these sales. But just how big the state’s windfall is and whether it is worth the social costs incurred by those who gamble with their money is an important question.

State lotteries are government monopolies that sell tickets for prizes such as cash and goods, such as cars and houses. They also raise revenue for a range of state programs, from paving roads to providing education. State governments promote the idea of lotteries as a “painless” source of revenue and pressure voters to support them. This is in an era when states are under constant budgetary stress, and politicians often view new forms of gambling as a way to avoid raising taxes on the public.

Despite the huge sums of money at stake, the vast majority of lottery players are not professional gamblers. Instead, they are people who, like most of us, have an inexplicable urge to try to improve their lives through chance. They are the kind of people who buy lottery tickets at the gas station and watch the commercials on TV that dangle the promise of instant riches. They know the odds are long and that they will probably not win, but they have a sliver of hope that they will.

Lottery is a centuries-old practice, with records of its use in the Old Testament and by Roman emperors to distribute land and slaves. The modern state lottery is a much more recent invention, however, with the first modern American lotteries beginning in 1964. Since then, no state has abolished a lottery. In the early days of the modern lottery, most lotteries were simply traditional raffles in which ticket holders waited for a drawing to be held weeks or months in the future. This changed in the 1970s with innovations such as scratch-off games and other forms of “instant” gaming, which allowed participants to win prizes on a shorter timescale.

The introduction of these new games sparked controversy, with critics claiming that they were exploitative and regressive to lower-income groups. Nevertheless, lotteries remain popular with the general population and have become part of state culture. They have cultivated a wide range of specific constituencies, from convenience store operators to lottery suppliers; lottery-related revenues have financed heavy contributions to political campaigns. Even teachers, in those states where lottery funds are earmarked for education, have come to depend on this additional income.

But, as with other vices that states subsidize with sin taxes (such as tobacco and alcohol), the lottery’s ill effects outweigh its benefits. As state finances continue to deteriorate, it is important to understand the true cost of lottery play and consider whether the social costs outweigh the profits. This is a key consideration in the debate about what role government at any level should play in managing activities from which it benefits.