Lotteries are a popular form of gambling. They’re also a way to raise money for public works projects. But is the prize really worth the risk? And what does it mean for those who play the lottery regularly? We’ve talked to a lot of lottery players, people who have played for years, $50 or $100 a week. And they’re a surprising bunch. They don’t fit the narrative we might have going into the conversation: They’re irrational, they’re duped by the ads, they can’t see that the odds are bad.
But there’s a lot more to the story than that, and it has to do with what lotteries are actually doing in society. Lotteries are dangling the promise of instant riches to an audience that is, at least in the United States, disproportionately lower-income, less educated, nonwhite, and male. And they’re doing that at a time when there is a lot of anxiety about inequality and the lack of social mobility in America.
The first records of lotteries in Europe come from the Low Countries in the 15th century, with some towns holding them to raise funds for walls and town fortifications, as well as to help the poor. The word lotterie comes from the Dutch “lot” (“fate”) and Middle French loterie (a calque on Old French loterie, “action of drawing lots”).
It’s not clear exactly how lottery prize pools are determined, but they tend to be based on the total value of tickets sold after expenses—profits for the promoters, the cost of promoting the lottery, and taxes or other revenues—have been deducted. Many lotteries offer a single large prize, but some have a number of smaller prizes.
In the past, governments and licensed promoters used lotteries to fund a wide variety of public projects, from building the British Museum to repairing bridges and funding the Continental Army during the Revolutionary War. Alexander Hamilton argued that “everybody…will be willing to hazard a trifling sum for the hope of considerable gain,” and that it would be more equitable than collecting taxes.
In the modern era, however, lotteries are more often seen as a form of hidden tax than a charitable enterprise. But despite this, they remain popular with the general public. And while some have criticized the abuses of the early promoters, there’s no doubt that lotteries are a powerful tool for raising money for state projects. As long as people continue to buy them, politicians will keep using them. And that’s something we need to take seriously.