In the modern era, state governments offer lotteries to raise money for education and other public projects. These activities are not without controversy, however. A number of people believe that lotteries encourage irrational gambling behavior, while others fear that lottery proceeds go toward corrupt politicians or into the wrong hands. Some states, such as New Hampshire and Arizona, have outright bans on the games, while others limit participation by age, gender, or location. A growing number of people are also worried about the ethical implications of state-sponsored gambling.
The argument that state lotteries promote a public good is one of the most common arguments used to justify them. But Cohen argues that this argument is flawed. For starters, it fails to account for the fact that the proceeds of a lottery are not a direct tax on citizens. Instead, the state’s financial health and the state’s ability to balance its budget are more important factors in determining whether or when a lottery is adopted. Lotteries are often viewed as a way to increase the amount of revenue that is available without raising taxes or cutting other programs.
For these reasons, a lottery should be seen as a form of indirect tax rather than a public benefit. As a result, it is not surprising that people are skeptical of this argument. In addition, some of the public benefits that have been claimed by lottery supporters are not actually provided by the lottery funds themselves. In fact, Cohen found that in most states, the actual percentage of the lottery’s total proceeds that are used for a particular purpose is only about five per cent.
In the United States, 44 states and the District of Columbia run lotteries. The six that do not are Alabama, Alaska, Hawaii, Mississippi, Utah, and Nevada. The reason for these absences vary; Alabama and Utah are largely motivated by religious concerns, while Mississippi and Nevada have competing gambling operations that would be harmed by a lottery. Alaska, in contrast, has a budget surplus from oil drilling that would be cut by a lottery and does not feel the need for an extra source of money.
While defenders of the lottery argue that it is a relatively painless source of revenue, critics point to problems with compulsive gambling and the alleged regressive impact on low-income communities. But these criticisms are both reactions to, and drivers of, the ongoing evolution of the industry.
The fact is that public policy in the field of gambling is often made piecemeal and incrementally, with little overall direction. This has been particularly true in the case of lotteries. As a consequence, few states have a coherent gambling or lottery policy, and the overall public welfare is only intermittently considered by lottery officials.