The Ugly Underbelly of the Lottery Business

The lottery has long been a popular way to finance public works, from paving streets to building wharves. In fact, it was one of the first methods used to fund the establishment of the earliest English colonies. Benjamin Franklin even sponsored a lottery to raise funds for cannons to defend Philadelphia against the British during the American Revolution. Today, state lotteries are widely supported and attract participants from all walks of life. Yet there’s an ugly underbelly to this lottery business: It can be very addictive, and it makes people believe that winning the lottery—even though the odds are extremely low—is their only chance of making a better life for themselves.

A common element of all lotteries is a pool or collection of tickets and counterfoils from which the winners are selected. This is usually accomplished by shuffling or mixing the tickets by hand or with mechanical means (like shaking or tossing). Computers are increasingly used to store information about each ticket and generate random combinations of numbers.

In most states, lotteries are run as a business with a focus on maximizing revenues and advertising. The result is that state officials are often at cross-purposes with the general public interest. They must promote gambling in order to raise money for public services, but they are also responsible for minimizing the negative consequences of gambling—which are often invisible to consumers—for the poor, problem gamblers, and others. Moreover, they must balance their responsibilities with the interests of convenience-store owners (the primary outlets for lottery sales), suppliers (heavy contributions to state political campaigns are regularly reported), and teachers, in those states where lottery revenue is earmarked for education.