The lottery, with its endless billboards and promises of instant riches, is a powerful force in our society. But it also is a dangerous one. It is a form of gambling that exploits people’s inability to separate their irrational desire to gamble from their rational calculation of the odds. Its alluring promise of a life that is free from the troubles of work and family creates a false sense of security and, as a result, contributes to widespread societal problems. Moreover, the way the lottery is structured makes it extremely difficult to control. Despite the fact that the lottery is a government-run activity, it has managed to become a powerful and profitable industry with its own constituencies. These include convenience store operators (who sell tickets); suppliers of goods and services related to the lottery (heavy contributions by these companies to state political campaigns are regularly reported); teachers (in states where lotteries are earmarked for education); and state legislators, who have quickly come to view the lottery as a “painless” source of revenue.
A lottery is a form of gambling that awards prizes according to chance. Its roots are ancient; the Old Testament instructed Moses to divide land among Israel’s tribes by lot, and Roman emperors gave away slaves and property by lottery during Saturnalian feasts. But the modern lottery originated in New Hampshire in 1964, and since then it has spread to all fifty states and the District of Columbia. In a recent book, journalist David Cohen traces the evolution of this wildly popular enterprise, showing how its advocates promote it by casting it as a painless form of taxation and how its operations have become increasingly complex.
Traditionally, lotteries are run by states and have been designed to benefit a variety of public uses. In the seventeenth century, for example, the Low Countries relied on them to build town fortifications and raise money for charity and welfare. In America, Benjamin Franklin sponsored a lottery to buy cannons for Philadelphia during the American Revolution, and Thomas Jefferson tried to hold a private lottery to pay off his crushing debts.
Today’s state lotteries typically offer multiple games, allow players to choose how they want to win—a lump sum or annuity payments—and have a variety of promotional tactics, including television and radio commercials. The odds of winning vary from game to game, but are always long.
As long as people’s desire to win exceeds their ability to calculate the odds, state lotteries are likely to remain a ubiquitous feature of the American landscape.
But lottery purchases cannot be accounted for by decision models based on expected value maximization, as they cost more than the prize. More general models that incorporate risk-seeking behavior can explain why some people purchase tickets, as can a more subtle explanation: the desire to experience a thrill and to indulge in the fantasy of becoming wealthy. For these reasons, the lottery is a fascinating phenomenon worth exploring.