The State’s Official Lottery

The state’s official lottery is an unwieldy and unreliable source of revenue. It’s inefficiently collected, and its total proceeds are a drop in the bucket, by some estimates, of actual state government income and expenditures. But it’s a big moneymaker, and the people who run it are always trying to find new ways to promote it.

The story of the lottery begins with early American colonial lotteries. Benjamin Franklin ran one to help fund Philadelphia’s militia, and John Hancock used one to raise funds to build Boston’s Faneuil Hall. The Continental Congress even attempted to use a lottery to pay for the Revolutionary War.

As a form of gambling, lotteries were not well-regulated and often became centers for corruption. But they worked, at least in part, because early America was “defined politically by an aversion to taxation,” Cohen writes. In fact, many politicians thought of lotteries as “budgetary miracles,” a way to bring in enormous sums of cash without the political pain of raising taxes.

As soon as one state legalized a lottery, neighboring states typically followed suit. This pattern is visible in the map below, which shows that states tend to adopt a lottery at roughly the same time. But the lottery remains a “flawed tool,” Cohen writes, “and one that ought not to be used for a single public purpose.” It’s not good enough just to make money; it has to be spent wisely.