Should States Be in Business of Promoting Gambling?

A lottery is a gambling game in which people pay a small amount to have a chance to win a much larger sum of money. Some governments outlaw lotteries, while others endorse them and organize state-sponsored games. Lottery profits are used to fund a wide range of government services, and sin taxes and income tax on winnings contribute significantly to the overall budget. While there is no doubt that lotteries provide a useful source of revenue, the question remains whether states should be in the business of promoting gambling, which has disproportionately negative consequences for poor people and problem gamblers.

Historically, state-sponsored lotteries have evolved in parallel ways: the government legitimises its own monopoly; sets up an agency to run it (rather than licensing a private firm in return for a percentage of profits); starts operations with a modest number of relatively simple games; and then, driven by the need for increased revenues, progressively expands both the number of games and the degree of complexity. The result is an increasing emphasis on the marketing of lotteries.

Despite the fact that most players know that they won’t win, they keep buying tickets, spending billions of dollars a year. Rather than wasting this money, it could be better spent on building an emergency savings account or paying down credit card debt. However, this is a difficult thing to do when the lure of the lottery has become so pervasive. The story begins with a simple rural scene in which an elderly man quotes a traditional rhyme: “Lottery in June/Corn will be heavy soon.” People are gathering stones for a lottery drawing.