Is the Lottery a Good Value for Taxpayers?

A lottery is a form of gambling in which multiple people purchase tickets for a small sum of money and winners are selected through a random drawing. Many countries have lotteries, and they are a popular way for governments to raise money for public projects. People can also use the process to fill positions in sports teams, in schools and universities and in many other contexts where resources are limited.

Although some critics view lotteries as addictive and harmful, a large proportion of people play them, and they contribute to state budgets. But it’s worth asking whether a lottery really provides a good value for taxpayers.

The lottery is a classic example of how public policy is made piecemeal and incrementally, rather than with a coherent overall plan in mind. When a state legislature establishes a lottery, it legislates a monopoly for itself; hires a state agency or public corporation to run it (as opposed to licensing a private firm in exchange for a share of profits); begins operations with a modest number of relatively simple games; and then, due to constant pressure to increase revenues, progressively expands the lottery’s size and complexity. This gradual evolution, in which specific features of the lottery are emphasized to the detriment of the overall policy, has produced numerous problems with the industry. Among these are the problem of compulsive gamblers and the alleged regressive impact on low-income neighborhoods. The question is how to make a better and more equitable lottery.