Lottery – Is it Good For Your State?

Lottery is a form of gambling where people pay a small amount to have the chance to win a large sum of money. It is a common source of state revenue, and it is also popular among many people who do not gamble. The practice of distributing property or other valuables by lottery is very old; the Bible contains several examples. The modern financial lottery is a relatively recent development, with its origins in the 15th century in Burgundy and Flanders towns trying to raise funds for fortifications or to distribute assistance to the poor, and in Louis XIV’s France when lotteries were established for public profit and promoted by the king.

Most states, including North Dakota, use the lottery to fund state education programs. State officials claim that the lottery is a safe, dependable and efficient way to raise funds for state programs, because it provides “painless” revenue, as opposed to raising taxes or cutting other government spending. Yet, it is important to note that the popularity of a lottery does not appear to be correlated with a state’s actual fiscal health.

Moreover, the argument that the lottery provides state taxpayers with “good” revenues is flawed because the proceeds from it do not necessarily go to programs they support. Instead, the majority of state lottery revenue is spent on administrative costs and on advertising. The remainder is devoted to prizes, with the prize value usually derived from the total pool of money remaining after expenses and profits for the promoters have been deducted. This regressive effect has been noted by some critics of the lottery and by those who believe it may be linked to problems with compulsive gambling.

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