The Hidden Cost of the Lottery

A gambling game in which tokens are sold and a drawing is held to determine winners. Prizes may be cash or goods. Several states have lotteries, as do some cities and organizations, such as the National Basketball Association, which holds a lottery to determine which team gets the first pick in the draft.

State governments use lotteries to raise money in a variety of ways, from purchasing land to paying for sports teams to giving away units in subsidized housing and kindergarten placements. The prevailing message is that the lottery is not just about gambling; it’s about raising money for good causes and helping those who need it. It’s a bit like the sin taxes that many governments impose on vices such as alcohol and cigarettes, in the hope that the increased cost will discourage people from engaging in those activities.

It’s an important message, but it’s not the whole story. For one, the amount of money raised by a lottery is very small in the context of overall state revenue. And, more importantly, the message has a hidden cost: it encourages people to gamble and spend more than they otherwise would if they did not do so for a good cause.

Some critics have argued that the popularity of lotteries is due to their perceived benefits to society, but they miss the key point: It’s not the money that lottery players make that is beneficial to society; it’s what they do with that money after they win.