Innovative government program design: the Dutch Postcode Lottery

Dutch Postal Code Lottery logo

In Washington state, where I grew up and where my sister and brother-in-law are teachers, lottery winnings have been dedicated to education since 2000. In 2012, the state Supreme Court found the state in violation of its own constitutional mandate to fully fund public education. And in 2014, the same court found the state in contempt of court for not yet allocating funding. Clearly, lottery funding doesn’t make a difference in Washington state.

Is there a better way to design lotteries for the benefit of society? The Dutch Postcode lottery could provide lottery program directors with a blueprint.

The Dutch lottery has several unique and community-oriented prizes:

  • Half of all the funds raised go to charitable organizations. Organizations such as UNICEF, WWF, Amnesty International, and Doctors Without Borders receive support from the Postcode Lottery. The lottery has dispensed €4 billion to charities so far.
  • Each week, an entire street is declared a winner. If you live on the winning street and purchased a lottery ticket, you win and so do your neighbors.
  • A few times a year, a whole neighborhood wins. But you have to buy a ticket to win.

To be sure, Holland is a small country and the Postcode Lottery will never hand out the megachecks seen in the United States with the PowerBall and MegaMillions lotteries. But the Dutch get to cheer for their neighbors, not just compete against them, to win. Plus, they can see the positive effects of their money even when they don’t win, in the non-profit work that they fund at home and around the globe.

Maybe there’s a lesson in there for lotteries in the U.S.

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