The New York Lottery is one of the biggest in the country. It sells millions of tickets every week and has given away more than $70 billion since its inception in 1967. Lottery winners are publicly announced and must go through a background check. They must also pay taxes on their prize and fill out paperwork. But a bill that would allow winners to stay anonymous has been stuck in the state Legislature for months.
State governments have long turned to lotteries to raise revenue, especially in the immediate post-World War II era when they were casting around for ways to increase services without enraging antitax voters. The lottery was portrayed as a source of income that would help the average citizen while maintaining the dignity of public service. But lottery proponents’ fantasy was ill-founded. In fact, the first legal lotteries brought in less than two percent of a state’s budget—and a significant percentage of that went to prizes and promotions rather than the business of running a government.
While there’s no national lottery in the United States, some jurisdictions share information on winning numbers and jackpots and jointly organize games with larger geographic footprints. These are known as multi-state games, and they tend to carry much higher jackpots than individual state games. The most popular of these are Mega Millions and Powerball, which have become de facto national lotteries, with the top prizes reaching hundreds of millions of dollars.
Although these large games are the most visible and well-known, many states have smaller public lotteries that are not officially organized as a lottery but operate as a means to gather “voluntary” taxes. These lotteries typically offer prizes such as free tickets and cash. They are often used to fund public works projects such as road construction and bridge repair, or to build colleges and universities.
In the early years of American independence, the Continental Congress voted to establish a lottery as part of an effort to raise funds for the Revolutionary war. The plan failed, but the practice continued after the war ended with public lotteries used to finance construction of Harvard, Dartmouth, Yale, King’s College (now Columbia) and several other American institutions of learning. Privately organized lotteries were also common, and they helped fuel the expansion of gambling throughout the country.
As state governments grapple with their own fiscal challenges in the wake of the Great Recession, a growing number have been turning to the lottery to boost their revenue. But while there’s no doubt that gambling has its risks, many experts question whether it’s wise for state governments to be in the business of promoting a vice by encouraging people to participate in lotteries. State lawmakers must weigh these risks when considering whether to permit or ban lotteries.