The Lottery – The Promise of Instant Riches in the Face of Stagnant Incomes and Limited Social Mobility

The lottery is a form of gambling that awards prizes to people who pay for a ticket. Prizes are usually cash, but can also be goods or services. A lottery is often conducted by a state government, though private lotteries may also exist.

Many critics of the lottery have focused on its regressive impact on low-income individuals, and its effect on compulsive gamblers. But there’s a more troubling issue at play: a lottery’s ability to dangle the promise of instant riches in the face of stagnant incomes and limited social mobility.

Lotteries are a classic example of a public policy that is established piecemeal and incrementally, with little overall overview or planning. The evolution of state lotteries is driven by a combination of factors: the desire for quick and easy revenue, political considerations of how to raise taxes, and the inertia of established bureaucracies.

In the immediate post-World War II period, lotteries allowed states to expand a range of social programs without significantly raising taxes. But as incomes rose and inflation accelerated, this arrangement started to crumble, and the need for additional revenue became more pressing.

Lotteries are now a vital source of state revenues, and the number of players is rising rapidly. The vast majority of players are in the 21st through 60th percentile of income distribution, a group that has few dollars left over for discretionary spending or opportunities to realize the American dream. This group spends a larger share of its income on lottery tickets than other groups do.