The Ethical and Policy Issues of the Lottery


A lottery is a type of gambling where numbers are drawn to win prizes. It has a long record in human history, with examples dating back to ancient times. For example, Moses was instructed to distribute land and slaves by lot and Augustus Caesar used the lottery to give away municipal repairs in Rome. Today, most states and the District of Columbia have lotteries. These are government-sponsored games that offer a chance to win cash and other prizes, often running into millions of dollars.

The popularity of lotteries has raised ethical and policy questions that go far beyond the simple question of whether it is right to encourage people to gamble for money. For one thing, it raises the specter of compulsive gambling. But it also raises the possibility that winning the lottery can be a ticket to financial ruin for those who are not careful. And, in the case of large jackpots, there is the risk that a few wealthy players will monopolize the prize and cause the price to soar.

Moreover, it is often difficult for lottery officials to make decisions that are in the best interests of the public, as the process is fragmented and incremental. The decision to establish a lottery is made piecemeal and the authority for evaluating the operation is divided among multiple branches of government and further subdivided within each. As a result, few state governments have a coherent gambling or lottery policy.

After a period of initial enthusiasm and growth, lottery revenues eventually level off and begin to decline. This prompts the introduction of new games to maintain or increase sales, and the creation of an industry that is in constant flux.

This continual change has led to the appearance of a variety of problems that stem from the lottery’s nature as a sin tax – a mechanism for raising revenue by targeting specific vices rather than general consumption. These include the tendency for lottery play to disproportionately affect lower-income groups; concerns about its addictive and socially harmful nature; and the fact that it diverts attention from other revenue sources.

The problem of addiction is particularly disturbing in a society that enshrines the value of hard work and thrift, and where wealth can create inequality and deprive individuals of a fair shot at upward mobility. Nevertheless, there is an inextricable human impulse to play the lottery. And, while gambling can lead to addictions, it is not nearly as expensive in the aggregate as alcohol or tobacco. Its costs can be far higher in the long run, however, and there are cases of winning the lottery making winners worse off than they were before the windfall. That is why it is important to consider the potential pitfalls of winning the lottery before taking on such a burdensome commitment. In the United States, federal taxes take 24 percent of winnings. In addition, the winnings are subject to state and local taxes as well. This can cut a winning prize down to half its original size.