Social Impact of Lottery Proceeds

A gambling game in which tokens are distributed or sold and the winnings are determined by chance in a drawing. The prize can be cash or goods. A lottery is often run by a government agency as part of its efforts to raise funds for public purposes.

In some cases, the prizes of a lottery are not awarded through a drawing, but are allocated by other means. This type of lottery is sometimes referred to as a quota or preferential allocation lottery. Examples include determining units in a subsidized housing block or kindergarten placements at a reputable public school.

People play lotteries because they enjoy the thrill of hoping that they might win. But critics charge that lottery advertisements are misleading, by presenting inflated odds and inflating the value of money won (which must be paid in annual installments over 20 years, with inflation dramatically eroding the current value); by promoting compulsive gambling; and by obscuring the regressive nature of the prizes.

Some states run the lottery in a businesslike manner, focusing on maximizing revenues and encouraging participation among targeted groups. Other states, including Massachusetts and Vermont, have run lotteries with a more social justice focus. In either case, these state-run lotteries can have a significant impact on the communities they serve. This article explores how the state of Massachusetts used the proceeds from its lottery to improve the lives of citizens in its cities and towns. It also highlights lessons from other states and the challenges of reducing reliance on gambling for revenue.