How the Lottery Got Started
Lottery is a kind of gamble in which the prize money—the jackpot—depends on how many tickets match certain numbers. People spend over $80 billion a year on the lottery, but even more than that could be redirected to paying off credit card debt, building an emergency fund, or starting a savings account for children. But winning the lottery can be a risky business, and more than a few winners go bankrupt within a couple of years of their win. Despite the odds, some people just plain like gambling. In fact, they like it so much that they’re willing to risk losing everything for a chance at instant riches. That’s one of the big messages lottery commissions convey to the public: that playing is fun, an experience, and a way to escape the monotony of daily life.
In the early days of state-run lotteries, the prizes were not huge, but they could be enough to buy a modest house or a luxury car, and that was the point: to give people the opportunity to make their dreams come true. Often, these dreams included a trip around the world or buying a large, luxurious home. The jackpots were not massive, but they were enough to attract a steady stream of new players, who fueled the growth of the games.
By the nineteen-sixties, with states facing a budget crisis and an anti-tax revolt, the lottery had largely outgrown its humble beginnings. It had become a major source of revenue, and, Cohen says, “the game’s growing popularity had nothing to do with the public’s dissatisfaction with government spending or the quality of their services.”
Instead, he argues, the modern lottery came into being when the rising awareness of how much money there was in the gambling industry collided with a looming deficit in state funding. As the population rose, inflation accelerated, and the cost of wars and the social safety net grew, it became difficult to balance the budget without raising taxes or cutting essential services.
The result was that a growing number of states turned to the lottery as an alternative solution, and it quickly spread from northeastern and Rust Belt states to the South and West. Lottery advocates were able to overcome the objections of the public by downplaying the regressive nature of the game and emphasizing that people played it for fun.
But the truth is that rich people, on average, buy fewer tickets than poor people—and they’re also less likely to spend more than they can afford to lose. A recent study found that people who earn more than fifty thousand dollars a year on average spend only about one percent of their incomes on tickets; those who make less spend thirteen per cent.