How the Lottery Fits Into the State’s Legitimate Functions


Lottery is an activity in which numbered tickets are sold for the chance to win prizes based on random selection. It is a form of gambling and can be used for public or private purposes. The casting of lots for deciding fates and allocating property has a long history (including several instances in the Bible). In more recent times, it has become a means of raising money for public projects and charities.

State lotteries are a popular source of revenue for governments, and they have a broad base of public support. While the debate over whether the lottery is socially acceptable focuses on its regressive impact on lower income groups and its contribution to problem gambling, it is also important to consider how well it meets the state’s legitimate functions in the economy.

In addition to providing a means of raising revenue, lotteries have many other effects on the economy and society, such as creating jobs in the retail sales, advertising, and marketing industries; encouraging people to spend time and money on entertainment activities; and generating positive publicity for the state and its agencies. These are all reasons why state governments have a duty to regulate and manage lotteries to ensure they are serving the best interests of their citizens.

Despite their controversial origins, modern state lotteries are remarkably similar in their basic structure: the state legislates a monopoly; establishes a governmental agency or public corporation to run it; starts with a modest number of relatively simple games; and, under pressure for additional revenues, progressively expands the lottery by adding new games and increasing promotional expenditures. The result is that the lottery is often at cross-purposes with other governmental functions and the overall public interest.

Because lottery revenues are not a direct tax on the citizenry, they tend to be perceived as “painless,” and state governments often feel compelled to maintain or increase their lotteries even in the face of other budgetary challenges. This is especially true in an anti-tax era when state governments have come to rely on the lottery for their major sources of non-tax revenue.

The popularity of lotteries in the United States has a long history that stretches back to colonial America, when the Continental Congress held a lottery to raise funds for the colonies’ various infrastructure needs. The colonial lotteries played a key role in financing roads, bridges, canals, wharves, and other public works, as well as helping to finance the founding of Princeton and Columbia Universities. Lotteries became particularly prominent during the Revolutionary War, when they helped fund public projects, including the building of Harvard and Yale.