Should Governments Be Involved In The Lottery Business?


The casting of lots to determine property, jobs and even fate has a long record in human history. The modern lottery, however, is a much more recent invention. Since New Hampshire sparked the modern era in 1964, almost every state has adopted one, and it is wildly popular: 60 percent of adults report playing at least once a year. But lotteries raise a number of questions, most of which center around whether governments should be in the business of encouraging gambling or not.

In general, the answer is no, but there are exceptions. Some state lotteries promote their games as a means to raise money for a variety of public uses, from street paving to college scholarships. In these instances, the lottery is a painless form of taxation that benefits a broad swath of society. But most state lotteries operate as commercial businesses whose goal is to maximize revenues. The way to do that is by promoting the game to all possible target groups, including convenience store owners (whose employees often work the booths); suppliers (often heavy contributors to state political campaigns); teachers (in states where lottery revenues are earmarked for education); and state legislators, who quickly become accustomed to the flow of new cash.

The lottery industry has also benefited from the development of “instant” games, such as scratch-off tickets, that feature lower prize amounts but offer higher odds of winning. Increasingly, these games are available to people who cannot afford the cost of traditional tickets. As a result, the jackpots of these games have grown to impressive levels, with the top prizes often reaching hundreds of millions of dollars.

Despite the high stakes, the chances of winning are usually very slim. In the case of the Mega Millions, the chances of winning a single ticket are one in more than a billion. That is why many players purchase multiple tickets and participate in syndicates, where they pool their money to increase their chances of winning.

While the low risk of winning can make purchasing a lottery ticket attractive, it is important to remember that lottery players as a group contribute billions to government receipts that could be used for other purposes, such as retirement or college tuition. In addition, lottery playing can consume a great deal of time and may even interfere with other activities, such as parenting or work.

A big reason for this is that most people have a difficult time turning off their brains when it comes to the lottery. Even when they know that the odds of winning are astronomical, most people still feel a pang of hope—that this time it will be their lucky day. This can be a dangerous mindset to get into, and it can lead to serious financial problems for the winners. Khristopher J. Brooks is a reporter for CBS MoneyWatch who covers a range of consumer and business stories, from economic inequality to bankruptcies. His work has appeared in The New York Times, USA Today, Fortune and Newsweek.