Public Policy and the Lottery

The lottery is a classic example of public policy being made piecemeal and incrementally, with little or no general overview. Lottery officials have inherited policies and dependencies on revenues that they can only partially control, and the advertising of lottery games necessarily promotes gambling at cross-purposes with the general welfare. Even if the promotion of gambling is minimal, can this be an appropriate function for state government?

A lottery is a game in which a prize, typically money or goods, is drawn by chance for participants who have paid an entry fee. A prize may be divided into smaller prizes or a single large prize. Lotteries are popular in many countries, and are an important source of revenue for governments, localities, and private entities. A number of issues arise in the regulation of lotteries, including how they should be classified as games of chance and how they should be marketed.

Lottery ad campaigns often present misleading information, inflating the odds of winning (e.g., by promoting multiple “winning” tickets or offering a larger prize for a lower probability of winning); the value of money won (lotto jackpot prizes are usually paid in annual installments over 20 years, with inflation and taxes dramatically eroding the current amount); and so on. Lotteries are also often promoted in poor neighborhoods, attracting players who are less likely to understand the risks and have lower incomes.

Jackson’s depictions of the villagers and their behavior suggest that human nature is deceitful and evil, and that humans are inclined to manipulate one another for their own gain. Although a person’s purchase of a lottery ticket could be rational under some circumstances, the disutility of the monetary loss is likely to outweigh the entertainment value of the ticket for most people.