Categories: Gambling

The Social Consequences of Lottery

Lottery is a popular activity that generates billions of dollars in revenue every year. Its widespread popularity, in the United States and elsewhere, is often attributed to its low costs and perceived ease of entry. In reality, lottery participation is very different from other forms of gambling and has many significant social consequences.

Public lotteries first emerged in the 17th century, when colonial governments began using them to raise funds for a variety of projects. Benjamin Franklin sponsored an unsuccessful lottery to purchase cannons for the defense of Philadelphia during the American Revolution, and Thomas Jefferson held a private lotto in 1826 to alleviate his crushing debts. After a long period of decline, the practice was revived in the 19th century with the founding of state-run lotteries in several states.

Most modern state lotteries begin by legislating a monopoly for themselves, then establish a government agency or public corporation to run the lottery (as opposed to licensing a private firm in exchange for a share of profits). They start small, with a limited number of relatively simple games, and gradually expand their offerings as revenues grow. This expansion has produced a second set of problems.

As a result of intense pressure to increase revenues, lottery officials have come under strong pressure to promote the games as fun and exciting, and to emphasize their high-dollar prizes. Lottery advertising frequently presents misleading information, with prizes advertised as far higher than they are in actuality. Winnings are commonly paid in the form of an annuity payment that is inflated by annual inflation, and withholding taxes further reduce their value.

The regressive nature of lottery proceeds is obscured by the fact that most state governments “earmark” a portion of the money for particular purposes, such as public education. This practice allows the legislature to save on appropriations from its general fund and use the lottery revenues instead, a practice criticized by many critics.

Moreover, the growth of lottery revenues has prompted many states to expand their operations beyond traditional games, into video poker and keno and other newer offerings. The proliferation of lottery-related activities is often a response to declining interest in traditional lottery games, and to the need to attract young adults and other potential lottery participants.

Although lottery play is fairly evenly distributed by income, it varies by socio-economic group. Men and minorities are more likely to play than whites, and people with less formal education are more likely to play than those with college degrees. Some scholars argue that the popularity of the lottery may be an expression of a desire to escape from an impoverished and unfulfilling world. Others, however, note that the odds of winning are extremely low, so lottery players should consider their decisions carefully before spending large sums of money in the hope of improving their lives. Regardless of motives, it is important for state legislators and citizens to understand the full implications of this activity.

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