The lottery is a popular source of revenue in many states, and it’s also a great way to try your luck at winning big. But how much can you really win and where does the money go?
Historically, state lotteries have operated like this: legislators legislate a monopoly; establish an agency or public corporation to run the lottery (as opposed to licensing a private company in exchange for a portion of profits); begin operations with a modest number of relatively simple games; and then, under pressure to generate more revenues, expand through the addition of new games. The result has been a classic case of policy made piecemeal and incrementally, with little or no general oversight and no consolidated view of the whole business.
In the 1800s, religious and moral sensibilities turned against gambling in all its forms. This may have helped give rise to a movement to end slavery, including a lottery run by Denmark Vesey, an enslaved person who raised funds for his planned revolt. But it also gave rise to a growing suspicion of corruption. Lottery organizers could, and sometimes did, sell tickets but then abscond with the proceeds without awarding prizes.
Lottery revenues grew quickly when first introduced, but have since plateaued and even begun to decline. Moreover, studies show that the poor participate in the lottery at a rate far lower than their proportion of the population. This has led to calls to “earmark” lottery proceeds for specific purposes, such as public education, but critics argue that this simply shifts the appropriations away from the legislature’s general fund and into a more discretionary area.