Why Governments Shouldn’t Promote the Lottery

The lottery is a popular form of gambling where numbers are drawn for prizes. Most states have a lottery and players spend more than $100 billion on tickets each year. Governments have long used lotteries to raise money for a variety of projects, including roads, canals, churches and colleges. But lotteries are dangerously addictive, and people who win large jackpots often find themselves worse off than before. This is because of a combination of the risk of addiction and the huge tax burden that winners must face.

While people who play the lottery say they enjoy the entertainment value and other non-monetary benefits, economists have analyzed whether these gains outweigh the costs. They conclude that it is unlikely that the disutility of a monetary loss can be outweighed by non-monetary benefits for any individual. Consequently, lottery revenues typically expand dramatically after they are introduced, then level off and even decline. To keep revenue levels up, lotteries continually introduce new games.

Moreover, the players are a distinct group: they are disproportionately lower-income, less educated, and nonwhite. Those who buy the most tickets are also disproportionately likely to be addicted to gambling. This makes it easy to see why governments should not be in the business of promoting this vice, especially when it generates such a small share of state budgets.

In the post-World War II period, lottery advocates argued that state governments needed to expand their array of services without raising especially onerous taxes on the middle and working classes. This arrangement was a key factor behind the growth of state gambling.