As state governments grapple with budget crises and anti-tax revolts, lottery games have become popular as a way to bring in revenue. But the odds of winning aren’t so much in your favor as you might think. The money you put into a ticket is only one part of the story; the state and federal government are actually bigger winners in the end. The reason is that the lottery system relies on tactics designed to encourage players to buy more tickets, and the more people who play, the higher the jackpot prize rises and the greater the overall windfall for everyone involved.
The word lottery has its roots in the Dutch noun lot (“fate”), but in its modern form it dates from the nineteenth century. The game’s popularity surged in the late twentieth century, as a growing number of states faced fiscal problems that were impossible to solve without raising taxes or cutting services. Lotteries offered a solution that wouldn’t anger voters, and as Cohen points out, “The national lottery has become the primary source of public funds for education, infrastructure, and health care.”
Lottery games are not inherently evil, but they do have serious flaws that make them a bad idea. The main problem is that people have difficulty understanding how the odds work. Lottery advertisements are coded with an implicit message that winning the lottery is easy. This is not true, and it obscures the regressivity of lottery spending.
To understand why, consider the following example: If you have 250 employees, and you choose 25 of them at random, each of these subsets will have the same probability of being chosen — it’s a simple mathematical fact. But if you pick employees in an order that’s biased towards the most senior workers, the chances of them being chosen will be different. This is what happens when you select people for a lottery in an order that’s biased against them.
A lottery is essentially an auction, in which people compete for the opportunity to win a fixed prize. In some countries, people can participate in a lottery by buying tickets or placing bets, while others hold private lotteries for their friends and family members. The prizes range from cash to goods.
While the concept of a lottery is ancient, the first known record of a lottery was found in China. The Chinese were using keno slips in 205–187 BC to win prizes such as food and clothing. The word lottery itself probably came from the Middle Dutch noun lot (fate) or Old French noun loterie, which itself is believed to be a calque of the Arabic noun al-lot ‘the drawing of lots’.
Today, people buy lottery tickets in gas stations and convenience stores, and they watch Powerball and Mega Millions drawings on television. And although the games may seem benign, there is a dark side to them: they are designed to be addictive. All of the marketing, mathematics, and design that goes into these games is meant to keep players coming back for more. This isn’t particularly surprising; it’s not unlike the strategies used by video-game makers or tobacco companies.