Public Policy and the Lottery

A lottery is a game in which tokens are distributed or sold, and the winning token (or tokens) are selected by lot. The drawing of lots to determine ownership or other rights has a long record in human history, including several instances in the Bible. During the sixteenth century, the Low Countries began to use public lotteries to raise money for town fortifications and other projects.

In the modern era, New Hampshire pioneered state lotteries in 1964, followed by New York in 1966 and 12 other states in the 1970s. The success of these lotteries created a demand for similar games in other states, and the resulting proliferation of state lotteries was driven by a desire to raise money for various public purposes without raising taxes, a need for a quick source of revenue, and a general acceptance that gambling is an acceptable activity.

The establishment of state lotteries is a classic case of public policy being made piecemeal and incrementally, with the overall resulting industry evolving far in advance of any government control or oversight. As a result, public officials have little or no overall view of lottery operations and, instead, are faced with the day-to-day pressures of trying to maximize revenues while responding to specific constituencies, such as convenience store operators; lotteries suppliers (heavy contributions by these companies to state political campaigns are frequently reported); teachers (in those states in which lotteries generate significant income for education); and so forth.