Should Governments Be Promoting Gambling?


The concept of making decisions and determining fates by the casting of lots has a long history in human culture. Lotteries in the modern sense, as government-sponsored and publicly-run games that give away prizes for a small fee, are comparatively recent developments. Historically, private individuals organized lotteries for charitable or other purposes, and public lotteries were a popular form of painless taxation that allowed governments to fund a variety of important public uses. The Continental Congress, for example, voted to establish a lottery to raise funds for the American Revolution. The first recorded public lotteries to offer tickets with prizes in exchange for a fee appear to have been held in the Low Countries during the early 15th century for such purposes as town fortifications and helping the poor.

Once established, state lotteries have tended to grow in size and complexity over time. They also tend to develop extensive, specific constituencies: convenience store owners (the main vendors for lotteries); suppliers of services to the lotteries (heavy contributions by these businesses to state political campaigns are often reported); teachers (in states where the proceeds are earmarked for education); and state legislators who quickly become accustomed to the revenue.

It’s easy to see why people like to play. People just plain old like to gamble, and if they can win a big prize, why not? It’s a kind of self-destructive behavior, to be sure, but there’s an inextricable human impulse at work here. In any case, as government-sponsored enterprises, lotteries are marketed as the best way to get rich quick, and they’re in a position to capitalize on this inextricable human behavior.

But there’s a deeper issue at stake here, and it’s the question of whether or not governments should be in the business of promoting gambling. It is certainly true that gambling can lead to addiction, but there are already plenty of other places for people who wish to engage in this vice to do so. And it’s also true that the relatively minor share of state budget revenues generated by lotteries is not nearly enough to justify this promotion.

In a world where governments are largely driven by the need to meet ever-increasing demands for social services, it’s tempting for state leaders to view the proceeds from a lottery as an opportunity to expand the range of government activities without imposing especially onerous taxes on the middle and working classes. Unfortunately, that’s not a sustainable strategy. As the lottery industry has expanded into keno and video poker, the growth rate of ticket sales has slowed significantly. As a result, lotteries are starting to face some of the same problems that other vices do: they’re becoming less appealing to many potential customers. As a result, the long-term viability of this type of government enterprise is under serious question. If this trend continues, we may soon see states beginning to rethink their reliance on the lottery. Then they’ll be left with the tough choice of either abolishing it or coming up with a better way to pay for public services.