Public Benefits of Lottery Games


A lottery is a form of gambling in which people purchase tickets and a drawing is held to determine the winner or winners. Typically, the prizes are money or goods. Lottery games are generally legal and, in most cases, are run by state governments. Critics of the lottery point to a host of negative social impacts, including its promotion of addictive gambling behavior and its characterization as a major regressive tax on lower-income groups. Moreover, they argue that lotteries may be at cross-purposes with the state’s duty to promote the public welfare.

The first modern lotteries were held in the Low Countries in the 15th century to raise funds for town fortifications and to help the poor. The earliest known lotteries were similar to today’s, with players buying tickets for a chance to win a fixed prize amount based on the number of tickets sold. Modern lotteries feature a variety of games, from instant-win scratch-off tickets to daily numbers games where bettors choose either five or four numbers. A computer may also randomly select the numbers for players who do not wish to do so themselves, in which case the playslip must be marked to indicate that they are accepting whatever numbers the machine chooses.

Many states promote their lotteries as ways to raise money for a specific public purpose, such as education. This argument is often effective, especially during periods of economic stress, when state budgets are under pressure and the prospect of tax increases or cuts in popular services are looming. However, it is important to understand that the proceeds from the lottery are not always earmarked for the particular purposes stated by the state, and they have a tendency to increase overall state spending.

Moreover, because the state is in the business of making profits, the advertising for lottery games necessarily emphasizes maximizing revenues. This is accomplished in a variety of ways, including by exaggerating the odds of winning (by, for example, suggesting that the jackpots will be paid in annual installments over 20 years with inflation dramatically eroding the initial value); by inflating the amount of money won (by claiming that a player can “buy a home,” for example, when the only option is a modest apartment); and by emphasizing the large sums that can be won.

The result of this emphasis on maximizing revenues is that lottery advertisements are often deceptive, and in some cases even illegal. The most common type of illegal advertising involves presenting misleading information about the odds of winning, or about the percentage of revenue that is returned to bettors, which is typically less than 50 percent. This practice has generated significant controversy over whether it is appropriate for the state to engage in this type of advertising.