Public Policy and the Lottery

Public Policy and the Lottery


In a state where the lottery is big business, public policy on the industry tends to evolve piecemeal and incrementally, with little general overview. Few, if any states have a coherent “gambling policy.” And once the lottery is established, many of the most serious issues that arise—such as compulsive gambling or its regressive impact on lower-income groups—are both reactions to and drivers of the ongoing evolution of the industry.

The modern American lottery began in the nineteen sixties, Cohen observes, when an obsession with unimaginable wealth arose alongside a crisis in state budgets. A growing population, rising inflation and the cost of the Vietnam War put strains on government services and the economic security of middle-class and working families. In a time when it was not uncommon for people to lose their jobs and even their homes, it became harder than ever to balance a state’s books without raising taxes or cutting services, both of which would have been deeply unpopular with voters.

Lotteries are a source of “painless” revenue, Cohen notes, which can allow states to expand their services and avoid steep tax increases for the middle class and working poor. In the early days of the lottery, politicians and citizens saw this as a way to provide an array of benefits that might otherwise require costly new taxes, such as subsidized housing units or kindergarten placements at reputable schools.

Originally, state-run lotteries provided funding for everything from the building of the British Museum to the repair of bridges. In the American colonies, Benjamin Franklin sponsored a lottery to raise money for cannons to defend Philadelphia from the British. The lottery grew into a national pastime and generated enormous profits, which were used for everything from the restoration of Faneuil Hall to paying off the nation’s debts after the American Revolution.

Today, the lottery is one of the most successful forms of legalized gambling in the world. It generates billions in annual revenues, while offering the promise of instant riches to millions of participants. The prize money is enormous and the advertising is incessant. But the advertising is meant to obscure the regressive nature of the game and to make it seem like a harmless hobby.

The fact is, however, that the regressivity of lotteries is not just about the size of the jackpot or how addictive playing can be; it also has a lot to do with the way that lottery commissions promote the games. They do this in a variety of ways, from the slick graphics on lottery advertisements to the math that goes into lottery machines and is designed to keep players coming back for more.

In the end, this is what makes lottery such a remarkably effective tool of exploitation, explains Jackson. It takes advantage of an inextricable human impulse, the urge to gamble, to try to make a fortune. And it does so in a way that is both subtle and sly. It deceives by playing off of the gullibility of the human brain and the need for instant gratification.