A lottery is a game of chance in which winning requires some amount of luck. The casting of lots for material rewards has a long history-Nero was quite a fan of them in the Roman Empire, and they are even attested to in the Bible-but in modern times the word has come to refer specifically to games that award prize money based on random chance. For example, the decision of which judge gets assigned to a case is often described as “a bit of a lottery.”
Lotteries were once a major source of revenue for states, in part because they helped finance European settlement of America and despite Protestant prohibitions against gambling. And though they’ve never enjoyed universal acceptance, state lotteries have always been popular among the public. In fact, the only state in which a lottery has ever been rejected by voters is North Dakota.
To keep ticket sales robust, lottery organizers must offer a respectable percentage of the total pool as prizes. From that, they must deduct costs such as advertising and organizational expenses, and a small percentage is generally given to the lottery sponsor or state. But the remaining sum is available for winners. Potential bettors are generally most attracted to lotteries with large prizes, and ticket sales increase dramatically for rollover drawings. But, as a recent study of the Dutch Staatsloterij shows, large jackpots may be counterproductive to the lottery’s goal: raising funds for public use.
As the popularity of lotteries grew, however, states began to face budget crises and needed ways to raise money without alienating an increasingly anti-tax electorate. The solution was the lottery, whose appeal to voters is that it’s a painless form of taxation.
While rich people do play the lottery (and one of the larger-ever Powerball jackpots was won by three asset managers), it’s lower-income citizens who have become the biggest purchasers. According to a report by the consumer financial-reporting firm Bankrate, lottery players earning over fifty thousand dollars a year spend about one percent of their income on tickets; those making less than thirty-thousand dollars spend thirteen per cent.
During the late nineteen-sixties and early seventies, legalization advocates stopped trying to sell the lottery as a state silver bullet and focused on a single line item that would benefit a public service, typically education but also veterans’ benefits and elder care. This approach made it easier for voters to support the idea, since a vote against the lottery could be interpreted as a vote against these services. And in the wake of the financial crisis of the seventies, many states reverted to this narrower argument when they introduced lotteries.