Across America, people spent upward of $100 billion on lottery tickets in 2021. That makes the lottery the country’s most popular form of gambling. Yet it’s a gamble that’s often misunderstood, and it’s one with real costs for state budgets and for the people who play them.
Lottery is a game of chance in which numbers are drawn and the prize depends on how many matching numbers you have. The odds of winning vary widely, but usually the more numbers you match, the better your chances are. Lottery games are regulated by state governments, and each state has its own laws regarding how they’re run. Each state typically has a lottery division, which may hire and train retailers, set the prices of tickets and other products, select winners and verify that they are eligible to collect their prizes, and distribute promotional materials.
In the United States, 44 of the 50 states and the District of Columbia have a lottery. The six that don’t—Alabama, Alaska, Hawaii, Mississippi, Utah, and Nevada—have varying reasons for not running one. Alabama and Utah don’t have lotteries due to religious concerns; Mississippi and Nevada already allow gambling, and don’t want a competing entity taking away their revenue; and Alaska doesn’t have the need for the extra money that would come from a lottery.
The first recorded lotteries were held in the Low Countries in the 15th century, with towns raising funds for things like town fortifications and helping the poor through a system of randomly selected prizes based on drawing lots. The term “lottery” came to be used for the process in general, and it was soon applied to the specific prizes of cash or goods that were allocated using this method.
As the popularity of lottery games grew, governments sought ways to encourage their use while protecting people from the exploitation that could occur. They established laws to prevent shady operators, and created publicity campaigns designed to assure potential gamblers that the game wasn’t a big waste of money. They also made sure that the prizes were substantial enough to discourage people from playing if they didn’t believe they had much of a chance of winning.
Despite all these measures, the lottery is still a gamble. Even the biggest jackpots have small odds, and if no winner is found for a particular drawing, the prize will roll over to the next drawing. This is a common practice, and it’s partly why jackpots grow to apparently newsworthy amounts so quickly. But if the purpose of lottery games is to raise revenue, then why do they advertise aggressively and print gaudy tickets that look like nightclub fliers spliced with Monster Energy drinks? And how do we know if this money is making any difference in the lives of people who are playing the lottery?