The Problems of the Lottery

The lottery is a process that hands out something of limited supply (say, kindergarten admission at a prestigious school or a coveted spot in a housing complex) to people who pay a fee for a chance to win it. It is a form of gambling, but unlike the money bet in a casino or on a horse race, it involves no skill and, thus, does not involve any betting against other participants. It may also refer to any contest that is run by the government or a private company and that gives away prizes in return for payments from participants.

Historically, state lotteries have been an effective way to raise revenue for governments, but the practice is not without its problems. The most obvious concern is that they rely on a small group of super users for much of their revenues. According to anti-state-sponsored gambling activist Les Bernal, “The big problem is that a large percentage of the revenue from state lotteries comes from about 10 percent of the players. That’s a lot of revenue for a small percentage of the population.”

A more subtle concern is that they do not take into account the overall public welfare, assuming that there is one. Instead, as the history of state lotteries shows, they tend to evolve piecemeal and incrementally, with little overall oversight. Authority is often split between the legislature and executive branch, and the general public welfare only intermittently taken into account. Few, if any, states have a coherent “lottery policy.”

In recent decades, when the public began to doubt that state lotteries would float most of a government budget, legalization advocates shifted tactics. They no longer argued that the proceeds would fund some broad-based state service, but instead promoted a line item that was popular and nonpartisan, usually education or veterans benefits. It was a message that was easy to sell to voters. It was also hard to challenge, because it did not depend on a state’s objective fiscal condition.

Today, the lottery remains a major source of revenue for many states. But despite the high stakes, it is not a gamble that should be taken lightly. If you’re thinking of playing, be sure to read NerdWallet’s tips for lottery play and consider the bigger picture. Also, choose to play games with lower jackpots, as they will have a smaller pool of players and you’ll be able to increase your odds of winning. Also, try to avoid numbers that end with the same digits or clusters. This will decrease your chances of winning. Lastly, be sure to check out our picks for the best online lotteries. You’ll be glad you did! For more articles by NerdWallet’s writers, visit the My Writers page. If you like what you see, click the Follow button on the writer’s profile to keep up with their new posts. NerdWallet is an independent, nonprofit organization. For more on our editorial policy, click here.