The Problems of Playing the Lottery

The Problems of Playing the Lottery


Lottery is a form of gambling in which numbers are drawn at random to determine winners. Traditionally, the prizes have been money or goods. Lotteries can be run by state governments or private enterprises, such as corporations that produce scratch-off tickets. The rules of a lottery determine how many people can win, what percentage of the total prize pool goes to costs and profits, and whether the remaining sum is allocated to few large prizes or to a number of smaller ones.

The first recorded lotteries were held in the fifteenth century in the Low Countries, where towns used them to raise funds for town fortifications and charity. They spread rapidly, as states searched for solutions to their budget crises that wouldn’t enrage the growing constituency of tax-averse voters.

Those who advocate legalizing the lottery argue that it’s an easy, low-cost way to fund state services. But even though a lottery swells state coffers, Cohen argues that its popularity in America coincided with declining financial security for most Americans. In the nineteen-seventies, as households began to feel the impact of deflation, the lure of a huge jackpot became a substitute for saving and investing. People who won the lottery, Cohen argues, spend the majority of their winnings on more tickets and often wind up broke.

In the rare event that someone does hit it big, he or she may also face massive taxes and a host of other problems. The rich do play the lottery, but they buy fewer tickets than the poor, and their purchases represent a smaller percentage of their incomes. In fact, the wealthiest players, according to one study, spend only a little more than a million dollars a year on tickets.

It’s true that the odds of winning a jackpot are much lower than they were in the past. But, Cohen explains, the difference between one-in-three-million and one-in-three-hundred-thousand doesn’t mean very much to most people. In fact, the lower the odds, the more people want to play.

What’s more, the more people buy tickets, the higher the average ticket price—so that as the total prize pool grows, the proportion of winning tickets gets smaller and smaller. This is a classic example of how a market can become self-defeating. To avoid this, lottery commissioners have begun to lift their prize caps and make the odds of winning even smaller. They have also introduced “multi-state games,” in which a single ticket is eligible for multiple jackpots. This makes it even more expensive for most people to play, but it still satisfies the desire to increase one’s chances of winning.