The History of the Lottery

lottery

A lottery is a game in which people pay to enter a draw for a prize. The prizes can be cash or goods, and the chances of winning are dependent on the numbers drawn. Americans spend over $80 billion on lotteries each year, but this money could be better spent building an emergency fund or paying off credit card debt.

The first recorded lotteries were held in the 15th century in the Low Countries, but records show that they may have been much older. Prizes were used to raise funds for town fortifications, and to help the poor. In the 18th century, colonial America saw a huge growth in lotteries. They helped fund public works such as roads, libraries, churches, canals, and bridges. Lotteries also raised the money for the foundation of many colleges and universities. In addition, the colonies used lotteries to help finance private ventures such as emigration to Canada.

In the nineteenth century, lottery games continued to grow in popularity and became a common method of raising public funds. In the 1860s, lotteries raised more than half of all public funds. In a time when taxes were unpopular, it was easy to sell the idea of a lottery as a painless form of taxation.

Cohen’s narrative traces the emergence of lottery culture from its early incarnation to its modern form. It began, he says, when growing awareness of the large sums that could be won in the gambling business coincided with a crisis in state funding. With inflation rising and the costs of a war weighing on state coffers, it became harder and harder for states to balance budgets without raising taxes or cutting services.

Lottery advocates, no longer able to market the idea of a lottery as a statewide silver bullet, began to promote the concept as a way to finance a specific line item in the state budget, usually a service that was popular and nonpartisan, such as education or aid for veterans. In this way, they made it easier to convince voters that a vote in favor of the lottery was not a vote for gambling but for a necessary government service.

As the lottery became more popular, the odds of winning a prize declined. But this was counterintuitive: The more difficult it became to win, the more people wanted to play. The reason, as Hamilton had argued, is that people are willing to gamble trifling amounts for the chance of a considerable gain. Moreover, the expected utility of a monetary gain is greater than the disutility of losing the same amount. As a result, the number of people buying tickets to the New York Lottery grew as it lowered its odds from one in three million to one in fifty thousand.