A lottery is an arrangement in which prizes are allocated by chance. Prizes may be money, goods or services. It is a form of gambling and it has been criticised as addictive, but it is sometimes used to fund public projects. Lottery has a long history and was popular in the Roman Empire – Nero liked to play it – and it is attested to in the Bible, where the casting of lots is used for everything from dividing property among the Hebrews to deciding who gets to keep Jesus’ garments after his Crucifixion. In modern times it is a huge industry, with over two hundred million people worldwide buying tickets each year.
In the United States, state lotteries are very popular and widely available. More than 186,000 retailers sell lottery tickets, including convenience stores, gas stations, nonprofit organizations (such as churches and fraternal organizations), supermarkets, restaurants and bars, bowling alleys and newsstands. Retailers receive a commission on each ticket sold. Lottery personnel and retailers work together to ensure that merchandising and advertising are effective. Retailers also have the option of selling tickets online.
Lottery revenues are a major source of government revenue in many states. Despite their popularity, they are not immune to the economic fluctuation that affects all forms of commercial activity. In fact, during the nineteen-seventies and -eighties, lottery sales rose in tandem with declining financial security for most working Americans: incomes declined, unemployment increased, health-care costs soared, pensions eroded, and the national promise that a lifetime of hard work would eventually lead to wealthier lives largely disappeared.
The success of state lotteries reflects a profound change in American attitudes. In an anti-tax era, lotteries are seen as a way for states to raise funds without the public protest that would accompany a tax increase. Once a lottery is established, it tends to become entrenched, with its own specific constituencies: convenience store operators and their suppliers; teachers (in states in which lotteries are earmarked for education); state legislators (who quickly grow accustomed to the additional revenue); and so on.
The result is that, in most cases, the objective fiscal circumstances of a state do not influence whether or when it adopts a lottery. Instead, a lottery’s political success depends on the degree to which it is seen as a way for a state to promote an identified public good. Unfortunately, this means that the public interest is often sacrificed in order to maximize lottery revenue. As a result, many state governments are now dependent on “painless” lottery revenue and face pressure to continue increasing it. Few, if any, have a coherent public policy on gambling and the lottery.