The Truth About the Lottery


Lottery is the most common form of gambling in the world, with hundreds of millions of people playing each week. But despite the huge jackpots and ad campaigns, the odds of winning are slim—there’s a higher chance that you will be struck by lightning or become a billionaire than that you will win the lottery. And even those who do win find that it is far from a free ride. They often end up worse off than before they started, despite the fact that winning a million dollars would improve their lives more than one in three times.

The first public lotteries were held in the Low Countries in the fifteenth century, raising money for town fortifications and charity for the poor. The practice spread to England and America, where it was used for everything from building colleges to financing the American Revolution. The term “lottery” dates from the fourteenth century, and may be a calque on Middle Dutch loterij or Old French loterie (“action of drawing lots”). The earliest lotteries were probably organized by the state; for example, the English Parliament chartered the first national lottery in 1639 to raise money for the monarchy and war effort. Privately organized lotteries also existed for centuries, and were often used to promote businesses or services such as land.

Today’s lotteries are much larger than their ancestors. There are tens of thousands of games and tickets sold each week, with prizes that can reach into the billions. The prizes vary, but most are designed to encourage repeat participation. Many state lotteries now have multiple games with different rules and formats, as well as a variety of ways to play.

As the popularity of the lottery has grown, so too have concerns about it as a social problem. Some critics have charged that it encourages people to rely on chance to meet their financial needs, and that it can lead to a vicious cycle of debt and bankruptcy. Others point to research showing that lottery players spend more than they make, and that this spending tends to increase as incomes fall or as unemployment and poverty rates rise.

There is some truth to these charges, but they miss the point in important respects. Lottery advocates often argue that the gamble is not only harmless but necessary, a way for states to maintain essential services without enraging tax-averse voters. In truth, as Cohen notes, lottery revenue is responsive to economic fluctuations: it increases as incomes drop and as unemployment and poverty rates rise.

It is also true that the wealthy buy fewer tickets than the poor, and that they purchase a smaller percentage of their income in tickets. The average lottery player making fifty thousand dollars a year spends only one per cent of his or her annual income on tickets; but the average lottery player earning less than thirty thousand dollars a year spends thirteen per cent of his or her income.