A lottery is a game in which people pay to have an opportunity to win a prize, which could be anything from money to cars or jewelry. The odds of winning are extremely low, but players keep coming back. One of the reasons why is that they like to fantasize about what they would do with the money if they won, according to Dr. Fern Kazlow, a New York City-based clinical psychotherapist.
Despite the obvious risks, state lotteries enjoy broad public approval and remain popular during periods of economic stress. Their popularity can be attributed to the fact that they offer a “painless” revenue source, a major advantage in a time when voters may fear tax increases or cutbacks in government services. Lotteries are also attractive because they offer the promise that some of the proceeds will be used for a specific public purpose.
Although most states have their own games, all follow a similar formula: the government establishes a state-owned monopoly; establishes an agency or public corporation to run the lottery (as opposed to licensing a private firm in return for a share of the profits); begins operations with a modest number of relatively simple games; and then, due to constant pressure for additional revenues, progressively expands the lottery by adding more and more games. As the size and complexity of the lottery grows, so does its potential profit.
State officials typically argue that lottery proceeds benefit a particular public good such as education, and that this is why they should be encouraged. However, studies have shown that the popularity of the lottery is not related to a state’s actual financial health.
A state’s inclination to promote gambling and its benefits is also driven by the political dynamic described above. Lotteries allow politicians to raise money without raising taxes, and the resulting dependence on these “painless” revenues can put governments at cross-purposes with their constituents, who often prefer lower tax rates and higher spending for services.
Because state lotteries are businesses that seek to maximize revenues, their advertising necessarily emphasizes the potential for huge prizes, with the goal of convincing people to spend money on a ticket. This approach runs counter to the idea that government at any level should manage an activity from which it profits in a way that maximizes social welfare.
In addition, because lottery advertising focuses on persuading people to spend money on a ticket, it has the potential to promote gambling among vulnerable groups such as the poor and problem gamblers. Whether or not these problems are minimal, the question remains: Should a state be in the business of promoting gambling?
