Public Benefits and the Lottery

The drawing of lots to determine ownership or other rights has a long history, including several instances in the Bible. It also has been used in modern times to raise funds for towns, wars, colleges and public-works projects. The first lottery in the United States was established in 1612 to provide funds for Jamestown, the first permanent English settlement in America. Since then, state lotteries have been held to fund public and private ventures.

Whether it’s a scratch ticket or the state’s multimillion-dollar jackpot, lottery winners’ chances of winning vary considerably. The price of a ticket and the prizes on offer will affect the odds, as will the number of tickets sold and the amount of money the prize pool has after promoting expenses, profits for the lottery promoter, taxes or other revenues have been deducted.

While the appeal of a big jackpot is obvious, lotteries generally gain broad public approval because they are seen as raising money for a particular public good such as education. This public-service argument is especially persuasive when state governments are facing budget challenges or threats of cuts to popular programs.

However, research suggests that the public’s enthusiasm for lotteries does not correlate directly with a state’s actual fiscal health. In fact, states’ lotteries have enjoyed broad popular support even when their objective fiscal conditions are strong. In addition, studies suggest that once lotteries have become popular, revenue levels tend to level off and decline over time. This is because many people will eventually tire of buying and playing the same games, and will seek out newer, more appealing types of gambling.