The casting of lots to determine fates or distribute property has a long history in human societies, including several instances in the Bible. But the lottery as an instrument for material gain is much more recent, with the first recorded public lotteries held during the reign of Augustus Caesar to fund municipal repairs in Rome and in 1466 in Bruges, Belgium, for the announced purpose of providing assistance to the poor. Since the modern era of state-run lotteries began with New Hampshire’s in 1964, they have grown to become one of the most important sources of revenue for state governments.
There is, to be sure, a certain inextricable human impulse to gamble, and this is certainly a factor behind the popularity of lotteries. But there is much more to the story than that. Lotteries are a form of gambling that, if not exactly legal, is certainly highly regulated by states to ensure a high degree of fairness and consumer protection. Yet, despite this, the majority of people who play these games do not know that they are doing so in violation of their state’s laws.
Lotteries are a prime example of how the formation of public policy happens piecemeal, with little or no overall overview. State officials legislate a lottery; establish a state agency or public corporation to run it (rather than licensing a private firm in return for a share of the profits); begin operations with a modest number of relatively simple games; and, in response to a constant pressure for additional revenues, progressively expand those offerings.
But a lot is going on underneath the surface in state lotteries, and not all of it is good. For example, a large percentage of the money that is won by players does not come from people of high incomes. Instead, it comes from low- and middle-income neighborhoods, which are disproportionately represented in the lottery’s “winners” list.
Another concern is that lottery advertising frequently presents misleading information to potential customers. This is most commonly done by exaggerating the odds of winning a particular prize and inflating the amount that might be won. It is also common for lottery advertisements to promote the idea that winning a jackpot will bring instant wealth, when in fact it will be paid out in annual installments over 20 years, with inflation dramatically eroding the value of the prize.
Perhaps the most troubling aspect of state lotteries is how they have changed the way that the public perceives the role of government. When state lotteries first emerged, they were billed as a source of “painless” revenue that allowed states to increase their social safety net without raising particularly onerous taxes on the working class. But, by the 1970s, that arrangement was rapidly eroding under the strain of inflation and mounting debt, and it has never been fully restored.