State Lotteries as Fiscal Savior or Fiscal Fraud: A Look at the Evidence

Abstract

As early as 1966, the lottery was characterized as fickle form of ' At that time, only New Hampshire had a state lottery. In 1986, the number of lottery states will reach 22 plus the District of Columbia, including almost 60 percent of the nation's population. This increase in the number of lotteries reflects a popularity rare among public revenue sources. For example, 1984 lottery referenda in California, Missouri, Oregon, and West Virginia all passed by substantial margins; in only 10 of the 274 counties involved did the question receive less than half the votes cast. In the present environment, which is clearly pro-lottery, it is reasonable to examine lotteries as means of government finance. Has something changed to make them productive and acceptable sources of revenue, or does the growth of the state lotteries across the United States represent the expansion of a bad idea?