Lottery Funding – Is it Worth it?

Lotteries are the most common way governments raise money for public projects. Despite their popularity, however, there are serious questions about the fairness and effectiveness of lottery funding. The way that lottery funds are awarded, and the distribution of these monies across different groups in society, have raised concerns about whether or not these governmental programs are worth it.

The casting of lots to make decisions and determine fates has a long history, extending back to the biblical Old Testament and even to Nero’s Roman Saturnalia games. Eventually, the practice became more widely used to generate revenue for government operations, and that is how lottery began in the United States.

Basically, there are several elements to any lottery program: a pool of prize money, the costs of organizing and promoting the lottery, revenues for state or sponsor organizations, and profits for ticket sales agents. Out of this total pool, a certain percentage is typically deducted for taxes and administrative expenses. The remaining portion is then available to winners. Normally, a lottery will have a balance between few large prizes and many smaller ones.

The evocative short story “The Lottery” by Shirley Jackson depicts the arrangements made for one such lottery in a rural American town. Family heads plan to buy a set of tickets, one per family, with each ticket blank except for a single number that is drawn in black. The tickets are folded and put in a box, which the town patriarch keeps in his office. Then, in a little ceremony, the people draw their slips. As they do, there is banter, and the elderly man quotes a traditional rhyme: “Lottery in June/Corn be heavy soon.”

In the immediate post-World War II era, states were looking for ways to expand their social safety nets without imposing especially burdensome taxes on suburban voters. Hence, the lottery became a popular alternative to raising taxes. Advocates of the lottery argued that people were going to gamble anyway, so the government might as well collect the profits. They also argued that gambling would pay for public services that people regarded as nonpartisan — education, elder care, or public parks, for example.

Regardless of the specific reasons behind a lottery’s adoption, once it is in place, debate and criticism often shifts from the overall desirability of the enterprise to the details of how the lottery operates. These discussions may focus on how much the lottery entices compulsive gamblers or its alleged regressive effect on poorer communities. The latter concerns are legitimate, but they can sometimes obscure the fact that a lottery is a fundamentally flawed revenue source. Moreover, it can also lead to some unintended consequences, such as the growing number of children in foster homes who are unable to find suitable permanent families. This unfortunate development has sparked a new wave of concern among many social-service providers and lawmakers about the need to find a better way to help disadvantaged children.