Public Interest and the Lottery

Buying a lottery ticket has the potential to provide entertainment value, even if you don’t win. But the question is whether state lotteries, which are run as businesses with a focus on maximizing revenues, are at cross-purposes with the public interest. Do they promote gambling, which can have negative consequences for the poor and problem gamblers? And does promoting the gambling industry divert attention from other areas of state business such as education, public safety, and infrastructure?

In the immediate post-World War II period, states were able to expand their social safety nets without having to raise very high taxes. But, with inflation and the rise of the Vietnam War, that arrangement came crashing down, and today, states have much higher tax rates than they used to. That is why, in the 1970s, many people turned to the lottery for a source of new revenue.

Lottery is a form of gambling, and it’s a pretty dangerous one. But, a lot of people play it anyway, and there are a few reasons why. First, there’s the inextricable human impulse to gamble. Second, there’s the naive belief that if you win the jackpot you’ll have instant wealth. Third, there’s the message that the lottery is a good thing because it raises money for states.

Finally, there’s the advertising that tries to persuade people to buy tickets by overstating the odds of winning and inflating the actual value of the prize (since most jackpots are paid in 20 years or so, with inflation and taxes dramatically deflating the current amount). And then there’s the fact that lottery ads often target specific constituencies such as convenience store owners; lottery suppliers; teachers in those states that earmark lottery revenues for their schools; and so on.