The Ugly Underbelly of the Lottery

The casting of lots for a prize has a long record in human history, including several examples in the Bible. But it was only in the 1960s that states adopted a lottery to generate revenues and cut into illegal gambling profits. Lottery officials often argue that they are a painless way for state governments to fund social safety net programs, education, veterans’ benefits, and the like.

The first modern state lotteries were launched in New Hampshire and other Northeastern states that already had larger social safety nets to bolster; they also hoped to cut into the lucrative but illegal gambling games that were then on offer. Soon the movement spread to the West, and now most states have a lottery.

Each state adopts a basic model: it legislates a monopoly; sets up a public agency or corporation to run the lottery (as opposed to licensing a private firm in return for a share of revenues); starts operations with a modest number of relatively simple games; and then, as revenues grow, progressively adds more and more games. Eventually, the industry becomes a major commercial enterprise, and its advertising is aimed at persuading specific groups to spend money.

As a result, the lottery is not only at cross-purposes with the general public interest in terms of promoting gambling, but it has an ugly underbelly that can have negative effects on the poor, on problem gamblers, and on lower-income people in general. And because it is a game of chance, it also creates the illusion that there are ways to improve one’s odds by playing more frequently or betting larger amounts; but in reality, each ticket has its own independent probability, regardless of how many tickets are bought or how much is spent on them.