Public Policy and the Lottery
a competition in which numbered tickets are sold and prizes are awarded to the holders of numbers drawn at random, often as a means of raising money for the state or for charity. Some governments have a lottery division that selects and licenses retailers, trains employees of those retailers to use lottery terminals to sell and redeem tickets, promotes the lottery, pays high-tier prizes to winners, and ensures that players and retailers comply with state law and rules.
Many people play the lottery with the hope that it will solve their problems. But the Bible warns against covetousness (Romans 13:9), which includes the desire for money and the things that money can buy. People who win the lottery are often led to believe that winning will solve all their problems and make them rich. But such hopes are often empty, as shown by the Bible passage Ecclesiastes 5:10-15.
In most states, the establishment of a lottery is considered a public service and is subject to strict regulations by the legislature and the executive branch. Lottery profits are usually earmarked for specific public uses, such as education. State governments are often tempted to adopt lotteries because they are perceived as painless sources of revenue — players voluntarily spend their money and politicians gain access to tax dollars without raising taxes.
Lottery profits can be very high, but the costs of running the lottery are substantial and must be covered from other sources of revenue. For this reason, most state lotteries use a multi-tiered sales structure, wherein the majority of tickets are sold through independent retail outlets and a smaller percentage are sold directly by the state or by national marketers. In addition, the cost of prize payments must be deducted from ticket revenues and a portion must be set aside for administrative expenses and marketing.
Another problem with lotteries is that their revenue growth typically plateaus and even declines, requiring constant introduction of new games to maintain or increase revenues. Many of the new games, such as keno and video poker, are more addictive than traditional lotteries. The introduction of such games may also entice more players to participate in the lottery, which may lead to the need for more money prizes.
The evolution of state lotteries is a classic example of public policy being made piecemeal and incrementally, with little or no overall overview. Lottery officials are often forced to cope with a dynamic that is out of their control, because the public’s interest in lotteries depends on the perceived need for painless taxation. As a result, few states have a coherent gambling policy or a lottery plan that is based on a rational analysis of the overall welfare. This is a familiar pattern in state government, where the needs of the public are routinely sacrificed for the short-term gain of special interests. Ultimately, the long-term health of state government is likely to be adversely affected by this practice.
