Every year, hundreds of thousands of highly educated foreigners pin their hopes on securing one of the coveted H-1B visas, which grant them the opportunity to work in the United States. With only 85,000 slots available and a demand that far exceeds supply, the odds are slim. The unfortunate reality is that these visas are not awarded based on merit but through a lottery system—a process that, for nearly two decades, has been inefficient, unpredictable, and easily manipulated.

The H-1B visa program, established by Congress in 1990, was designed to fill gaps in the U.S. labor market, particularly for highly specialized jobs requiring at least a bachelor's degree. Tech companies, in particular, rely heavily on this program to attract top talent from around the world, talent they argue is essential to maintaining American competitiveness, especially against global rivals like China.

However, the lottery system, introduced in 2008 to create a "fair and orderly" allocation of these visas, has proven to be anything but. Recent investigations have uncovered widespread abuse, with IT staffing firms flooding the lottery with thousands of entries to increase their chances of selection. In some cases, multiple entities affiliated with a single individual have entered the pool more than 3,000 times. Outsourcing companies also frequently apply for more visas than they actually need, squeezing out other employers who adhere to the rules. These practices, which officials have described as "fraudulent," have allowed nearly half of the H-1B visas issued between 2020 and 2023 to go to the staffing sector.

This gaming of the system not only undermines the integrity of the H-1B program but also harms both aspiring visa holders and American workers. Data shows that 85% of H-1B petitions go to employers paying below the median wage for the relevant occupation and location. As a result, the lottery favors companies that exploit these loopholes, crowding out industry leaders like Google, Meta, and Microsoft. It also risks undercutting the domestic labor market by filling jobs that Americans could perform, often at lower wages.

To their credit, regulators have begun to address these abuses. Earlier this year, U.S. Citizenship and Immigration Services (USCIS) introduced a rule aimed at eliminating multiple entries for the same person. While this is a step in the right direction, it falls short of the comprehensive reform needed to address the root issues. The lottery remains intact, and bad actors continue to flood the applicant pool with little consequence.

A more effective solution would be to replace the lottery with a merit-based system. The U.S. could take inspiration from countries like Australia and Canada, which use a points-based system to evaluate applicants based on criteria such as education, work experience, skills, age, and English proficiency. Another option is to prioritize higher-wage earners, who are generally more skilled. A rule proposed by the Trump administration, which was later revoked due to a technicality, would have allocated visas based on wage levels, with the most visas going to the best-paid workers relative to their peers in the same occupation and region. This approach would ensure that the H-1B program rewards talent rather than luck.

The H-1B visa is an invaluable pipeline of talent for U.S. employers, and it plays a crucial role in sustaining American innovation and competitiveness. However, the current lottery system undermines its intended purpose. By shifting to a merit-based system, we can ensure that the best and brightest minds—those who truly contribute to the growth and success of our economy—are granted the opportunity to work in the United States. It's time to reward talent, not chance.