Is Promoting the Lottery Appropriate for a Government?

A lottery is a game in which numbers are drawn for prizes. It is a common form of gambling, and it also can be used to award limited resources such as kindergarten admissions or housing units in a subsidized apartment complex. The concept of lotteries has a long history, and it is a common feature of government finance in many countries, including the United States. The state typically legislates a monopoly and establishes a public agency to run the lottery. It begins operations with a small number of relatively simple games, then progressively adds new ones as revenue increases.

A large part of the success of lotteries is that people are willing to gamble a small sum for a chance at a substantial gain. The expected utility of a monetary gain outweighs the disutility of a monetary loss. This is a rational choice for most individuals.

But there are several important issues surrounding lotteries, including their role in redistributing wealth. First, the majority of players are disproportionately lower-income, less educated, and nonwhite. Those groups also tend to have higher rates of credit card debt and mortgage default. Americans spend $80 billion a year on lotteries, but those dollars could be better spent on emergency savings and paying off credit cards.

The second issue is that promoting the lottery sends the message that gambling is a good thing. It is important for governments to promote the best interests of their citizens, but is promoting gambling an appropriate function for a government?