Lottery – The Good, the Bad, and the Ugly

Lottery is a form of gambling in which players pay for tickets to be entered into drawing(s) that award prizes to winners, often large cash sums. Most states and the District of Columbia have legalized lotteries. In the United States, state-run lotteries take many forms including scratch off games and games requiring players to choose the correct numbers.

The growing popularity of lottery games in the 1980s can be attributed to widening economic inequality, a new materialism asserting that anyone can get rich through hard work and luck, and anti-tax movements that led politicians to seek alternatives to raising taxes. Additionally, a significant percentage of lottery sales are generated by a relatively small group of players who purchase multiple tickets. These players tend to be lower income, less educated, and nonwhite. This demographic is disproportionately represented in households that lose money playing the lottery or pari-mutual betting (Lang and Omori, 2009).

A common criticism of lotteries relates to their perceived regressive impact on low-income and minority groups. Another concern is that, since lotteries are run as businesses whose primary function is to maximize revenues, advertising necessarily focuses on persuading target groups to spend money on lottery tickets.

A third concern is that, even if lottery participation is not regressive or prone to addictive behaviors, it still diverts resources away from other activities that might better improve a person’s economic and social well-being. This includes the opportunity cost of purchasing lottery tickets, which subtracts from money that could be used to save for retirement or pay off debt quickly.