Lottery Revenues As a State Revenue Source

The casting of lots for determining fates and wealth has a long history in human culture. It was used for everything from distributing slaves to giving away land and even the ancient Romans held lottery games for municipal repairs. In modern times, state governments have embraced the concept. Today, 44 states and the District of Columbia run their own lotteries.

In fact, they have come to depend on them as a revenue source for state government. In an era of shrinking social safety nets and anti-tax sentiment, politicians are increasingly looking to gambling as a way to pay for services that may otherwise be impossible.

It is no surprise that lotteries are one of the fastest-growing forms of gambling in the United States. In a typical lottery, people buy tickets to be eligible for a prize ranging from a few dollars up to millions of dollars. The odds of winning are low, but the prizes are large enough to attract a significant number of people. This, in turn, leads to a virtuous cycle as people buy tickets and revenues rise.

But what happens to the money that people hand to lottery retailers? Some of it goes to commissions for the retailers and other administrative costs. But a portion of it also goes to the state, which uses that money to fund projects like education, infrastructure, and problem gambling initiatives. This arrangement is problematic, because it involves the government at every level profiting from an activity that it itself promotes.