Despite the odds of winning being quite slim, Americans spend an estimated $80 billion a year on state-sponsored lotteries. Lottery play is widespread, with 60% of adults reporting playing a lottery at least once per year. It is especially popular among lower income groups, although whites and those over age 65 tend to be less enthusiastic about the games. The popularity of the lottery is not entirely due to its meritocratic premise that everyone will be rich someday: many people also view it as a form of entertainment and a way to relieve boredom.
Throughout history, governments have used lotteries to raise money for all sorts of purposes, from building roads to resolving family disputes. They were common in the Roman Empire, where Nero was a big fan; and in colonial America, where they were often tangled up with the slave trade (one enslaved man won a prize that allowed him to buy his freedom in a Maryland lottery). The popularity of lotteries has continued even as they have been increasingly embraced by state government officials, who find them appealing because of their capacity to generate “painless revenue.”
While critics point out that lotteries are generally regressive (the poor pay more for tickets than do the rich), they also note that state revenues from lotteries have increased rapidly since the first modern state lotteries began in 1964. This growth, in turn, has fueled the development of numerous specific constituencies, including convenience store operators, lottery suppliers (heavy contributions from them to state political campaigns are regularly reported), teachers in states where lottery proceeds are earmarked for education, and state legislators who quickly become accustomed to the additional revenue.
Lotteries’ growing popularity in the United States is largely the result of an economic argument: State governments are desperately short on revenue, but voters don’t want state taxes raised, and they don’t have much appetite for cutting services. In this environment, politicians have been able to sell the idea of a lottery by stressing that it is a painless source of revenue and a way to raise funds for important public goods without punishing voters at the polls.
This argument has been effective – it appears that, at the state level, an objective assessment of the fiscal situation does not factor into whether or when a lottery is adopted. As Clotfelter and Cook point out, the popularity of state lotteries has little relationship to a state’s actual financial health. And while the argument has proved successful in times of fiscal crisis, it does not always work during good economic conditions.