The Costs of Running a Lottery


A competition based on chance in which numbered tickets are sold and prizes, often large amounts of money, are awarded to the holders of winning numbers. Governments often run lotteries to raise money.

Despite the low odds of winning, lottery games contribute billions to state coffers each year. They are an important source of entertainment for many people and a way for some to improve their lives. But the benefits of playing a lottery must be measured against the costs.

While high jackpots generate publicity and attract new players, they also increase the amount of tax revenue the lottery must collect to cover its operating expenses. As a result, state legislatures that once promoted lottery games as a budgetary silver bullet now find themselves seeking out other ways to balance the books. They can no longer argue that a lottery would float all the state’s debt, and they have to frame their pitch as a way to fund a single line item in a popular, nonpartisan area—education, for example, or elder care or public parks or veterans’ aid.

The cost of running a lottery involves paying workers to design scratch-off games, record live drawings and keep websites up to date. These costs are not insignificant, and a portion of the winnings is set aside to pay them. But even with the overhead, a lottery can be an effective funding tool, especially when demand for something is very high—whether it’s kindergarten admission at a good school or a slot in a subsidized housing block or a vaccine against a fast-moving virus.