The lottery is a classic example of public policy driven piecemeal and incrementally rather than from a broad policy perspective. Each state legislates a monopoly for itself; establishes a public corporation to run it (as opposed to licensing private firms in return for a share of the profits); starts operations with a modest number of relatively simple games; and, due to constant pressure for additional revenues, progressively expands the lottery in size and complexity.
While there are concerns about compulsive gambling, there is no doubt that state lotteries generate significant amounts of revenue. Lottery profits can be earmarked for specific purposes, including education, and in this way are a means of funding programs without raising taxes.
Regardless of whether they are used for charitable purposes, or to fund a state’s general budget, lottery proceeds have wide-ranging public approval. Lottery supporters point to the fact that money generated by the game is not being diverted from state government services, and this argument has proven effective in fending off opposition to the lottery.
Promotional campaigns present winning tickets as minimal investments with potentially massive returns, and these messages create aspirational appeal by portraying winners as enjoying new wealth and happiness. This aspirational appeal is central to triggering FOMO, which drives individuals’ fear of missing out on a chance to dramatically improve their lives. It also helps to explain why the lottery is popular among people from middle-income neighborhoods, and less so in low-income areas.