The official lottery was born of the immediate post-World War II period, when states could expand their social safety nets without especially onerous taxes on the middle and working classes. New Hampshire, a state famously tax averse, became the first to adopt a lottery in 1964; thirteen other states soon followed suit. In the years between then and now, state-run lotteries have raised a total of about $502 billion. Yet, by some estimates, that money ends up a mere drop in the bucket of actual state government revenue—as little as 1 to 2 percent. What’s more, critics charge, lotteries promote addictive gambling behavior and act as a major regressive tax on lower-income groups.

To counter these issues, the lottery industry reacted swiftly. It pushed for new games such as video poker and keno and intensified advertising efforts, notably through billboards. Moreover, it began to segment its market. Various demographic factors have been shown to influence lottery play: men tend to play more than women; blacks and Hispanics play more than whites; young people and the elderly tend to play less than middle-aged adults.

The result has been that the lottery business has grown to the point where it is now a substantial part of the national economy, and, like all businesses, must continually seek out ways to maximize revenues. As such, it operates at cross-purposes with a state’s duty to protect the public welfare. The question now is whether that can be remedied before it is too late.