Lottery Laws – Should States Be in Business of Promoting Gambling?

With Americans spending upward of $100 billion on lottery tickets each year, it’s clear that the game is a fixture in American society. But how much of that money goes to the poor, and whether the state really should be in the business of promoting gambling, remain important questions.

Since New Hampshire initiated the modern era of state lotteries in 1964, the arguments for and against them have followed remarkably similar patterns. In virtually every case, the state legislates a monopoly for itself; establishes a public agency or corporation to run it (as opposed to licensing a private firm in exchange for a share of the revenues); starts operations with a modest number of relatively simple games; and, under pressure to generate additional revenue, progressively expands its offerings.

Typically, the state takes a percentage of total sales as administrative costs and profits; a smaller portion goes to winners; and the remainder is available for the promotion of new games or larger prizes. In addition to advertising, lotteries also spend heavily on marketing, including mail, television, and radio commercials.

Many people who play the lottery are well aware of the odds against winning, and they have developed what critics call quote-unquote systems to maximize their chances of success—things like choosing lucky numbers or stores and times of day to buy tickets. Yet, in spite of the long odds, they continue to buy tickets, often with a sense of irrational confidence that the next draw will be their lucky one.