By adminweaIn a world of increasing state budget crises, it’s no surprise that lottery revenues are on the rise. But it’s worth asking whether a lottery is the right way for a state to raise funds, particularly in an era when anti-tax sentiment is strong and voters want more services with less pain.
Lotteries are essentially government-run games that award prizes based on random chance. Prizes may be anything from cash to goods or services. Typically, the prize money is divided into categories such as “top prize,” “next prize,” and so forth. The drawing of lots to determine ownership or other rights is a practice dating back centuries, as evidenced by biblical instructions on land division and by records in towns in the Low Countries in the 15th century for raising money to build walls and town fortifications.
Modern lotteries are established by states that grant themselves a legal monopoly on them. They usually start with a small number of relatively simple games, and then respond to pressures for increased revenue by expanding the portfolio of available games. They also grow by reducing the required investment per ticket, and by advertising to increase public awareness of the games.
Lottery play is widespread, and many people who never gamble otherwise invest in the game for a chance to win a big jackpot. But the truth is that lottery play has a risk-to-reward ratio that isn’t especially favorable, even for people who don’t consider themselves gambling addicts. And purchasing lottery tickets diverts resources that could be better spent saving for retirement or college tuition.