The Lottery Industry
Lottery is a form of gambling that involves a drawing for a prize based on a random process. Its roots extend back centuries. It is used in the Old Testament and Roman eras, and was brought to America by British colonists. In the United States, lottery participation has risen dramatically since New Hampshire introduced its state lottery in 1964, and now is a staple in the budgets of 37 states and the District of Columbia. The popularity of the lottery has spawned an enormous industry, involving convenience store operators; lotteries’ suppliers (who donate heavily to state political campaigns); teachers, in states where lottery revenues are earmarked for education; and, of course, state legislators.
Unlike most forms of government revenue, lottery funds are essentially voluntary contributions from citizens who choose to participate in the lottery rather than pay taxes. This feature has given lotteries a substantial measure of public approval, especially in times of economic stress. It has also allowed politicians to tout the lottery as a way to increase social services without raising taxes.
In the United States, lottery games have a long history, beginning in the 17th century when private lotteries were popular among merchants and tradesmen to collect money for charitable purposes. The first publicly organized lotteries, however, did not appear until the 18th century. These were primarily public service lotteries, with the proceeds earmarked for such things as street paving and construction of wharves. The Continental Congress held a lottery to raise funds for the American Revolution, and George Washington sponsored a lottery in 1768 to build roads across the Blue Ridge Mountains.
Because they are run as businesses with a focus on maximizing profits, lotteries must advertise their products to attract players. They promote their services through television, radio, and newspaper ads. They encourage play by offering large prizes and offering favorable odds of winning. They also use testimonials from previous winners to entice potential customers.
While lottery advertising is legal, it has raised serious ethical concerns. Critics have claimed that it exploits poor people and problem gamblers, and that it perpetuates stereotypes about those groups. The ads also have been accused of misleading consumers by presenting inaccurate information about the odds of winning, inflating the value of prizes (most lotteries award their jackpots in annual installments over 20 years, with inflation dramatically eroding the initial payout); and using misleading language to deceive the public about the likelihood of winning (the term “lottery” is defined in most jurisdictions as a game of chance, not skill or knowledge).
Many observers believe that state governments adopted lotteries because they perceived them as an effective means to raise necessary resources without imposing onerous tax burdens on working families. But the benefits of lottery are disputed, especially in light of state governments’ increasing dependency on these revenues. In the end, lottery supporters argue that they fulfill a vital public service by providing money to support essential government functions and by helping to mitigate the effects of declining revenues on working families.
