The Lottery Debate

a way of raising money by selling tickets numbered for a drawing to determine the winners of prizes, usually money or goods. The term is often used in reference to state-sanctioned games of chance in which the proceeds are used for public benefit. It may also refer to the distribution of prizes by chance, as in life’s a lottery—the way things turn out depends on luck.

Lotteries are popular with the general public and generate substantial revenue for states. Despite the popularity of the game, however, there is considerable debate about its desirability and underlying economics. A key issue concerns the regressivity of lottery proceeds and the impact on low-income groups. In addition, many critics charge that the marketing of lotteries is deceptive, with ads commonly presenting misleading information about the odds of winning; inflating the value of the money won (lottery jackpots are generally paid in equal annual installments over 20 years, with inflation and taxes dramatically eroding their current values); and so on.

Since New Hampshire initiated the modern era of state-sponsored lotteries in 1964, the debate over their desirability and structure has taken on strikingly similar forms across all states. It has also become increasingly focused on specific features of the operations, ranging from problems with compulsive gambling to the regressivity of the lottery’s revenue stream. Regardless of the specific focus, though, much of the criticism revolves around the basic argument that lottery revenues are not a form of taxation and are thus acceptable to voters who might otherwise oppose increased state spending.