The History of the Lottery

A lottery is a game in which participants pay money for a chance to win a prize based on chance. The prizes may be cash or goods. People have been playing lotteries since ancient times. They were common in the Roman Empire (Nero was a fan) and throughout Europe, and can be found in the Bible, where they are used for everything from selecting a king to divining the future of the Virgin Mary.

In America, state-run lotteries are a big business and raise billions annually. Many of those who play the lottery say they do so for fun, while others believe it is their only hope of a better life. But the odds of winning are stacked against you, and the more you play, the less likely you are to win. And even if you do win, you’re going to have to pay taxes.

The story of the modern American lottery begins in 1964 with New Hampshire’s adoption of a state lottery, and the rest of the country soon followed suit. The reasons for establishing a lottery differed from one state to the next, but the basic structure and evolution of a state lottery have remained remarkably consistent from one place to the next.

One common argument for adopting a lottery is that it is a less-disruptive method of raising money than imposing tax increases or cutting public programs. But studies show that the objective fiscal circumstances of a state have little effect on whether or when a lottery is adopted. Moreover, the popularity of a lottery is independent of a state’s financial health.

In fact, Cohen writes, “the rise in popularity of the lottery correlated with a decline in the economic security of most working Americans during the nineteen-seventies and eighties.” As income gaps widened, pensions eroded, and job security declined, the promise that education and hard work would bring you wealth and prosperity seemed to fade away. The lottery was seen as a way to escape the dreary economic reality that had enveloped many families.

But critics of the lottery argue that it is not just a form of entertainment, and that it is not really about luck. Instead, they say, it is about irrational gambling behavior and the lure of unimaginable wealth. Yet lottery critics overlook the fact that people who play the lottery go into it with their eyes open, and they understand the odds. They know that, for example, if they won the lottery, they would have to pay about 24 percent of their winnings in federal taxes—and even more in state and local taxes. They also know that most of the people who play have “quote-unquote systems” about lucky numbers, lucky stores, and the best time to buy tickets. And they are right to do so. After all, they are not irrational. They are trying to make sense of an irrational world. They are hoping that it will all turn out okay in the end.