The Ugly Underbelly of Lotteries

A lottery is a system of distributing something (typically money or prizes) among people by chance. The term is most commonly applied to a gambling game in which tickets are sold for a chance to win a prize, but the concept is also used for military conscription, commercial promotions in which property or money is given away by random selection, and even the selection of jury members. In all cases, the process involves a mixture of skill and chance.

In financial lotteries, the odds of winning are set so low that a typical individual’s total expected utility—which includes the entertainment value and other non-monetary benefits of participating in the lottery—is high enough to offset the negative disutility of a monetary loss. Because of this, the purchase of a lottery ticket is considered a rational choice for most individuals.

However, as the odds of winning get worse and lower, this calculation changes. Eventually, even one-in-three-million odds isn’t nearly small enough to satisfy most individuals. This is where the ugly underbelly of lotteries really starts to show itself.

The first recorded public lotteries were held in the Low Countries in the 15th century, with towns trying to raise funds for fortifications and poor relief. The games spread to America after the arrival of British colonists, despite Protestant proscriptions against gambling.

By the nineteen-sixties, growing awareness of all the money to be made in the gambling business had collided with a crisis in state funding. With a rapidly growing population, rising inflation, and the cost of the Vietnam War, states found it harder than ever to balance their budgets without raising taxes or cutting services.

As a result, many started looking for ways to boost revenues that wouldn’t enrage voters. Among the most popular ideas was legalizing the lottery. Many of these new advocates dismissed long-standing ethical objections, arguing that if people were going to gamble anyway, it might as well be government-run and taxed.

Cohen’s book focuses on the American experience with lotteries, though he does mention some European examples as well. He argues that the lottery’s rise was facilitated by a combination of factors, including changing attitudes about risk and the importance of money in modern society, the development of electronic communications, and a deep-seated need to make sense of our chaotic and unpredictable world.

Americans spend over $80 billion on lottery tickets each year, and the average household has about six tickets. The vast majority of winners never collect their prizes, and those who do often find themselves bankrupt within a few years. Although the odds of winning are astronomically low, the fact that there is a chance that you will becomes an obsession and a source of false hope. Whether you play or not, it’s important to recognize the trap that lottery addiction can be and take steps to avoid it. Here are some tips to help you do so:

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