The lottery is one of the world’s oldest forms of public policy, a system by which the state selects a small number of people to receive something valuable. It can be a good way to distribute property, such as land or houses; services, such as public education or medical care; or goods, such as food or clothing. It is also used to award prizes in sports and other events, such as a chance to appear on a game show or become the next pop star. The concept has a long history, going back to the Old Testament and Roman emperors’ granting of slaves and property through a drawing of lots.
In modern times, governments have turned to the lottery as a means of bringing in revenue without increasing taxes or cutting essential services. As the economy slumped in the nineteen-sixties, states faced an ever more pressing need to fund their budgets without enraging their tax averse voters. As Cohen explains, it was in this context that New Hampshire passed the first modern state lottery in 1964 and that other states followed suit.
Lotteries are a classic example of public policy being shaped piecemeal, with little or no overall plan and with authority often divided between different agencies. As a result, there are few, if any, states with a coherent gambling policy or a lottery policy. The evolution of lottery policies is driven by political considerations, economic conditions, and other factors that vary widely from place to place.
In the early days of American colonial life, lotteries were a popular source of income for the Virginia Company and other ventures that needed capital. They were also a common form of philanthropy, helping to fund hospitals, churches, and even to free a few convicted criminals. Like everything else in that era, though, they were tangled up with slavery in unpredictable ways. George Washington managed a lottery whose prizes included human beings, and Denmark Vesey won a South Carolina lottery to purchase his freedom and then went on to foment slave rebellion.
Today, lottery critics tend to focus on more specific features of the operation: alleged problems with compulsive gambling; the fact that winning the lottery doesn’t guarantee you a lifetime of wealth or health; and the regressive impact of lottery money in low-income communities. These criticisms are valid, but the truth is that most states rely on lottery revenues to finance a wide range of programs and activities that would otherwise be funded by higher taxes or cutbacks.
Moreover, the evidence suggests that the poor participate in state lotteries at rates far below their proportion of the population. This is not a problem in itself, but it underscores the need to address the underlying dynamics of inequality, poverty, and opportunity that are driving these trends. The solution is not to abolish the lottery, but to take steps to ensure that it operates fairly and serves the interests of all. In this, we need to start by rethinking the way that lottery proceeds are distributed.