During the fourteen-hundreds, the lottery became common in the Low Countries as a way of funding town fortifications and charity for the poor. In the seventeenth century, it spread to England, where it was used for everything from selecting a new king to determining who should keep Jesus’s garments after his crucifixion.
Although some people play the lottery just because they like to gamble, most buy tickets because of a desire to become rich. The odds of winning are long, but many players believe that they can beat the odds by following some sort of quote-unquote system of buying tickets in lucky stores or at lucky times of day. In addition, some players believe that playing the lottery is a “civic duty” because it helps raise money for state projects.
Cohen argues that the rise of the modern lotteries began in the nineteen-sixties, when state budget crises drove the nation’s tax aversion into overdrive. With a growing population and ballooning costs squeezing state coffers, balancing the books quickly became impossible without raising taxes or cutting services. Since both options were unpopular with voters, states began looking around for alternative revenue sources, and the lottery seemed to offer a perfect solution.
State lotteries are not run as public service organizations, but as for-profit businesses with a primary goal of increasing revenue. To do so, they must promote their games to target groups with specific demographic characteristics. Advertising strategies thus focus on persuading the poor, the elderly, and other vulnerable groups to spend their money. While this may be necessary to maximize profits, it puts state lotteries at cross-purposes with the larger public interest.
The question is whether this conflict of interests is justified. The answer, as with many public policy decisions, depends on the specific circumstances. Lotteries operate in a context where authority and pressures are fragmented across government agencies, with the result that many of them are driven by narrow, short-term interests. As the industry evolves, public officials often inherit policies and dependencies on lottery revenues that they have little control over.
As a form of gambling, the lottery is a dangerous enterprise. Its glamorization of instant riches is especially harmful for a society struggling with inequality and limited social mobility. Moreover, it promotes irrational behavior and can lead to problem gambling. Ultimately, the state must weigh these tradeoffs to determine whether running a lottery is in its best interest.
In general, lottery purchases cannot be explained by decision models based on expected value maximization, as the tickets cost more than the monetary gain they represent. However, the curvature of individual utility functions can account for lottery purchasing, as can more general models that incorporate risk-seeking behavior.
Despite their many flaws, state lotteries remain popular and lucrative. They draw a majority of participants and revenues from middle-class neighborhoods, while lower-income residents participate at disproportionately low levels. These disparities reflect a fundamental disconnect between the values of state lotteries and the realities of American life.