The official lottery is a state-run enterprise that offers games of chance with the winnings usually being cash prizes. Traditionally, it is a popular way of raising money for public purposes and for promoting civic and sporting activities. Its popularity grew in the late twentieth century as states searched for ways to finance a growing array of public functions without incurring especially onerous tax increases on middle- and working-class citizens.
In the beginning, the lottery was seen as a way of providing painless revenue. Its advocates argued that the people who play the games voluntarily spend their own money and in doing so provide funds for public works projects. Thus, unlike traditional taxes that burden the general population, lottery revenues are derived from a limited and select group of taxpayers. This argument was particularly persuasive in a society that had come to be defined by its aversion to taxation.
After the initial promise of painless funding, however, concerns began to emerge about the lottery. Its critics argued that its revenue generation was not as “painless” as advertised and that it would ultimately impose an unfair burden on poorer members of the population. In addition, it was feared that the lottery would lead to increased gambling addictions and create a dependency on state government funding.
These concerns were largely ignored by voters and politicians as the lottery rapidly expanded in the United States. New Hampshire approved the first state-run lotter in 1964, and thirteen more followed suit within a few years. State officials viewed the lottery as a means of funding everything from the construction of churches to public education systems without incurring any of the political costs associated with a tax increase.
Lottery revenues typically expand dramatically after a state introduces the game but then plateau or decline. This is a result of the lottery’s dependence on consumer demand for new games. The industry is constantly seeking to develop new games that will appeal to consumers in order to maintain or even increase revenues.
Many of these new games have been modeled on illegal numbers games that were once widely available in most urban neighborhoods. These games have the advantage of being legal and of allowing patrons to choose their own numbers, a feature that appeals to gamblers. In addition, studies have shown that players of these types of games are disproportionately drawn from lower-income communities.
Despite the proliferation of new games, the debate about the lottery continues to focus on questions of policy rather than consumer demand. In particular, lottery officials have every incentive to tell voters that the game is helping their state – a point that voters find difficult to accept. Moreover, lottery officials have limited oversight from legislators and state officials who have little or no interest in the long-term growth of the industry. This lack of oversight has exacerbated the lottery’s alleged problems with compulsive gambling and its regressive impact on low-income communities.