The Dangers of Playing the Lottery

The lottery is the most common form of gambling in America and generates enormous amounts of money, enough to subsidize a range of government programs. Its popularity stems partly from its publicity, with mega-sized jackpots and out-of-the-blue scratch ticket miracles routinely featured in news reports and online. Another factor is the sense that a lottery ticket offers a chance to beat the odds. This may feel empowering, but it can also be debilitating.

The origin of lotteries is obscure, but they can be traced back at least a thousand years. Ancient Greeks used them to determine the distribution of property and slaves, while Roman emperors organized them as a form of entertainment at dinner parties. They were especially popular in the seventeenth century, when wealthy people often gave away pieces of wood with symbols on them to their guests for a chance to win grand prizes such as land or jewelry.

In the twentieth century, a growing number of states adopted them to finance government budgets and bolster social-welfare programs. They became a significant source of revenue, though not as transparent as a state income tax. Unlike a tax, lottery revenues do not appear in state budgets, and consumers do not see them as a hidden tax. In the late nineteen-sixties, a time of soaring inflation and war spending, balancing state budgets became increasingly difficult. As public anger over the Vietnam War grew, tax resistance deepened; state governments were unable to increase taxes or cut services, and many began to turn to the lottery for funding.

Lotteries are often promoted as a way to give the poor a chance at riches, but this is misleading. While some disadvantaged individuals do play the lottery, it is more often a rational choice for those with more wealth. Those with higher incomes tend to buy more tickets and to purchase them at a greater proportion of their disposable incomes, generating larger prizes. This creates a kind of vicious circle, as the large prize money attracts more and more players and increases the average amount spent by each player.

Those who spend more on tickets have a lower expected utility from them, and are thus less likely to find the games enjoyable. Moreover, a low expected utility from the game can make it hard to quit — even when an individual has spent a lot of money on tickets.

As a result, lottery commissions have begun to promote the idea that the lottery is simply fun and a good way for people to spend their free time. This message is meant to counteract the regressive nature of lottery spending, and the fact that it is a form of taxation that is not transparent to consumers. But it has the added effect of obscuring the underlying costs and risks of the lottery for some consumers. The truth is that the lottery is a form of taxation, and one that affects the middle class far more than it does the poor.