A lottery is a method of allocating prizes to people by chance. Typically the prize is money, but in some cases it can be anything from housing units to kindergarten placements. It is a common form of allocation in both civil and political affairs.
The casting of lots for determining fortune has a long history in human culture, including several instances in the Bible. However, lotteries as a means of distributing material goods for commercial gain are far more recent. Initially, they were probably aimed at raising funds for town defenses and helping the poor. The first European public lotteries with money prizes appeared in the Low Countries in the 15th century, although records of earlier private lotteries for charitable purposes may exist.
Modern state-sanctioned lotteries are usually run as businesses, with a focus on maximizing revenues. They are a source of “painless” revenue that politicians look to for financing new programs without increasing taxes. The promotion of gambling has been criticized for its negative consequences for the poor, for problem gamblers, and for society as a whole. In addition, there are ethical concerns about the role of a government agency in selling a product that can be addictive and harmful.
Despite these criticisms, there is no doubt that the state-run lotteries are popular with their constituents and have helped to fund many worthy public projects. In colonial America, they were used to finance roads, canals, churches, colleges, and even the foundation of Princeton and Columbia universities. During the Revolution, Benjamin Franklin sponsored a lottery to raise money for cannons to defend Philadelphia against the British. Thomas Jefferson sought permission to hold a private lottery to relieve his crushing debts, but was unsuccessful.
Lottery revenues are also used to fund public education in the United States. The amount varies by county and is determined based on average daily attendance for K-12 school districts, and full-time enrollment for community college schools and higher education institutions. This funding source is a significant part of the budgets of some states.
The question that remains is whether or not the lottery is a legitimate function for the state to serve. Historically, the state legislates a monopoly for itself; establishes a government agency or public corporation to manage the lottery; begins operations with a modest number of relatively simple games; and, due to the pressure to generate high revenues, progressively expands its offerings by adding new games. This expansion is often accompanied by a dramatic increase in sales and profits, which eventually levels off or declines. This is known as the lottery’s “boredom effect,” which is fueled by a desire to maintain and grow revenues. The result is that, while lottery revenues are a valuable resource for the state, they do not appear to be particularly stable or sustainable. Moreover, the state’s approach to running the lottery seems to be at cross-purposes with the broader policy goals of its residents. For these reasons, we do not support the continued existence of state-sanctioned lotteries.