A lottery is a game of chance in which people attempt to win a prize based on the drawing of lots. The casting of lots for decisions and fates has a long record in human history, including several instances recorded in the Bible. But the use of lotteries for material gain is more recent. Today, many states conduct state-sponsored lotteries, with prizes ranging from cars to vacation homes to cash. Typically, lottery players buy tickets for small amounts of money, and win the prize if their numbers are drawn. The winnings are usually paid in equal annual installments over a period of 20 years, with inflation and taxes dramatically eroding the present value of the prize.
In colonial America, lotteries were a major source of funds for both private and public ventures. They helped pay for roads, canals, churches, colleges, and, during the French and Indian War, to finance a militia expedition against Canada. Benjamin Franklin sponsored a lottery to raise money for cannons to defend Philadelphia against the British. Thomas Jefferson, who died in debt, tried to use a lottery to ease his financial problems.
These days, the 44 states that run lotteries (you can’t play Powerball or Mega Millions in Alabama, Alaska, Hawaii, Mississippi, Utah, or Nevada) get 70 to 80 percent of their revenues from a tiny fraction of their players. That’s a big problem, and not just because people tend to overplay — it has a more fundamental effect on social equity.
For starters, it means that the lottery skews toward upper-middle-class and wealthier neighborhoods. People from poorer areas play at lower rates, and there’s a strong perception that lottery money is a way for the middle class to avoid paying higher taxes. This, in turn, fuels an inequality spiral that’s already tearing at the heart of the American dream.
Second, a large chunk of the lottery’s revenue is spent on advertising, which often portrays winners as glamorous and happy, and promotes the idea that playing the lottery is an inexpensive form of entertainment. Critics charge that much lottery advertising is deceptive, presenting misleading information about odds of winning the jackpot; inflating the value of the money won (lottery jackpots are typically paid in equal annual installments over 20 years, with inflation and taxes dramatically reducing the current value); and so on.
Finally, people have a deep-seated desire to gamble, especially on large prizes. This is partly a response to the psychological need for a sense of achievement, but also because they feel that playing the lottery gives them a “fair” shot at a better life than the one they’re living now. This belief is reinforced by a flurry of stories about people who won big and then went on to achieve enviable lifestyles. It’s no wonder that billboards dangling huge jackpots draw so much attention. But, as Les Bernal of the anti-state-sponsored gambling group the Pew Charitable Trusts points out, these are merely glitzy headlines for a largely unsustainable business model.
