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Lottery – Is It Socially Beneficial?


Lottery is a form of gambling in which numbers are drawn for a prize. Governments, both federal and state, and private promoters have long held public lotteries to raise money for many purposes including civic projects, such as building bridges or the British Museum. Privately-organized lotteries were also common in England and the United States and helped fund several American colleges (including Harvard, Dartmouth, Yale, King’s College, and William and Mary) and civic projects.

Because lottery games are run as businesses aiming to maximize revenues, their marketing is necessarily focused on persuading target groups to spend more money. This means that the overall objective fiscal circumstances of state governments, which are often cited as the motivation for adopting a lottery, are rarely taken into account, at least not consciously.

Moreover, because lotteries are essentially a form of advertising, they tend to increase their popularity when the economy is stressed and state governments are under pressure to increase taxation or cut spending in other areas. This is why it has been found that, in general, state lotteries are at cross-purposes with the broader social welfare.

In addition, most people are unaware that if they win the lottery they are able to choose whether to receive their prize in a lump sum or annuity payments. In most countries, the latter option is preferred by players because it gives them a smaller amount of money at one time. This is because the value of a lump sum decreases with time, and this is also before considering income taxes which are likely to be deducted from the winnings.