The casting of lots to determine fates and material gains has a long record in human history. It is, however, relatively recent that lotteries have been used to raise public funds, with the stated purpose of benefiting specific public interests. Lotteries have become popular in virtually every state, largely because of the attractive argument that they represent a painless source of revenue: voters voluntarily spend money on tickets (which are taxed only at a very small rate) and politicians look upon it as an alternative to raising taxes or cutting public services.
Lotteries are promoted primarily by claiming that proceeds will be used for a particular public purpose, such as education. Critics point out, however, that the money “earmarked” for such purposes remains in the general fund and can be spent on whatever the legislature chooses. This has resulted in lottery revenues rising, but appropriations for targeted recipients have not increased.
Another problem is that lottery play adds billions to government receipts, money that could be devoted to a wide range of worthwhile public investments. It is also a drain on household budgets, diverting resources that would otherwise be saved for such purposes as retirement or college tuition. Moreover, the low risk-to-reward ratio of lotteries can lure households into spending in ways that are counterproductive to their long-term economic security. Lotteries have thus spawned a whole new set of problems, in addition to the negative effects on the poor and problem gamblers that are already apparent.