Public Goods and the Lottery

Lottery is a form of gambling in which participants purchase tickets with numbers or symbols that correspond to numbers drawn at random. The winner receives a prize, usually money. Often, the prize is more than the cost of the ticket, but this is not always the case. In the United States, state governments run most of the nation’s lotteries. The lottery is a popular source of revenue for state governments and a significant portion of the proceeds are used for public goods, such as education, parks, and funds for seniors and veterans.

While the casting of lots for decisions and fates has a long history (and several examples in the Bible), the lottery as an arrangement to award material prizes is much more recent, dating back at least to the 15th century in Burgundy and Flanders where towns held lotteries to raise money for town fortifications or to help the poor. Francis I of France, in his capacity as duke of Milan, approved lotteries in Italy for his own personal benefit and that of the d’Este family.

When the lottery was first introduced in America, it made a rare point of agreement between Thomas Jefferson, who saw them as little riskier than agriculture, and Alexander Hamilton, who grasped what would turn out to be its essence: that everybody “would prefer a small chance of winning a great deal to a great chance of winning little.” Early American lotteries were also tangled up with the slave trade, and George Washington managed a Virginia lottery whose prizes included human beings. Later, lottery play became a popular way to raise money for schools and other institutions, despite strict Protestant prohibitions against dice and cards.

The lottery became a central tool in the expansion of the social safety net after World War II, when states sought ways to increase their range of services without placing too heavy a burden on the middle and working classes. But the lottery, in addition to being an enormously profitable form of gambling, has also had a number of pernicious effects, and some people have questioned whether it’s really such a good idea to be using it to fund programs for which the demand is so high.

It’s true that people have an inextricable urge to gamble, and lotteries appeal to this basic human impulse. But it’s also true that there are other messages lotteries send out, including the message that it is a good thing to spend your hard-earned dollars on a chance of instant riches in an age of inequality and limited social mobility.

One of the big problems with that message is that it ignores the fact that the vast majority of lottery players will lose. But the other problem is that it misleads people into thinking that a vote for the lottery means a vote against taxation. And, in the end, that’s just a bad idea.