The History of the Lottery

A lottery is a game where paying participants have a chance to win a prize based on the random drawing of numbers or symbols. In the United States, state lotteries generate billions in revenues each year, and the winnings often go to people who are not particularly well-off already. The casting of lots to decide matters of fate has a long history in human society, but the lottery as an instrument for material gain is a much more recent development.

The modern lottery was born in the nineteen sixties, when state budgets began to collapse under a growing population, inflation, and the cost of Vietnam War-related expenses. State leaders faced a choice: They could either hike taxes or cut services, but both options were highly unpopular with voters. So they invented the lottery, which offered politicians the opportunity to make revenue appear seemingly out of thin air without enraging voters.

For state legislators, the lottery was “a budgetary miracle,” Cohen writes, a way to maintain existing services without increasing taxes and thus risking punishment at the polls. At the same time, it gave citizens a chance to get rich quickly, which appealed to many.

Lotteries quickly spread across America, and by the fourteen-hundreds had gotten tangled up with slavery in unpredictable ways. George Washington managed a lottery that awarded prizes including human beings, and Denmark Vesey won the South Carolina version of the lottery and went on to foment a slave rebellion.

During the lottery’s early days, most states adopted a similar model: They legislated a monopoly for themselves (rather than licensing private firms in return for a portion of proceeds); started with a small number of relatively simple games; and then, as demand increased, progressively expanded their offerings in size and complexity.

As a result of these efforts, today’s lottery is a massive enterprise with an enormous market for scratch-off tickets and pull tabs—a type of ticket where the numbers are hidden behind a perforated paper tab that must be broken to reveal them. Several hundred million dollars are spent on these products each week, and the winnings are often used to fund public services.

Because state lotteries are run like businesses with an eye to maximizing revenues, advertising necessarily focuses on persuading people to spend their money. As a consequence, it promotes gambling even though most people who play the lottery do not need to. It also promotes gambling in a way that has negative consequences for the poor and problem gamblers. Is this an appropriate function for a state?