A competition based on chance in which numbered tickets are sold and prizes are awarded to the holders of numbers drawn at random. Lotteries are often used to raise money for public or private purposes, such as building roads, schools, or hospital facilities.
Despite the enormous amount of money a lottery can generate, the game is not a free-for-all. The winners must come from somewhere, and studies show that ticket sales are disproportionately concentrated in poor and minority neighborhoods. That’s why some people have argued that lotteries are regressive and should be abolished.
The earliest recorded lotteries were held in the Low Countries in the 15th century, when towns raised money for town fortifications and other charitable causes by selling tickets. They were popular among the public because they provided an alternative to paying taxes.
Today, 44 states and the District of Columbia have lotteries. The six that don’t—Alabama, Alaska, Hawaii, Mississippi, and Utah—have their own reasons for not running them. Some are religiously opposed to gambling; others, like Alaska and Utah, already get their share of casino profits and don’t want to have a competing lottery. Then there are those, like Mississippi and Nevada, that see no need for a new revenue stream because they have bigger problems to worry about.
But even the states that run lotteries can’t simply stop them; they have to manage them well. Those state coffers that swell thanks to ticket sales and jackpots have to be balanced against the cost of running the lottery itself. The truth is, there’s a lot of overhead involved in running a lottery—people design scratch-off games, record live drawing events, keep websites up to date, and work at headquarters to help winners after a big win. All of that costs money, and it comes out of the pool of prizes available to the winners.
A big part of what lottery marketers are trying to do is convince the public that the game is fair and fun, not just a source of huge amounts of cash. Super-sized jackpots are a great way to do that, since they earn the lottery plenty of free publicity on newscasts and online. But they also obscure the regressivity of the whole thing.
Lotteries might be a great idea for states that need to fund services like education and infrastructure, but they shouldn’t be seen as a way to avoid raising taxes on the middle class and working class. That’s why it’s so important that we talk about the real costs of the lottery, not just about how much people are winning.