The History of the Lottery


Lotteries date back at least to the Roman Empire (Nero was a fan) and are common in many cultures. They are sometimes viewed as an alternative to paying taxes and can be played for anything from dinnerware to gold coins to a free vacation. The idea behind a lottery is that an individual’s expected utility from the entertainment value or non-monetary gain he or she receives from playing exceeds the disutility of losing money. If it does, the ticket purchase is a rational choice for that individual.

Cohen argues that the modern lottery came into its own in the nineteen-sixties, as growing awareness of the enormous profits to be made from gambling collided with state budget crises. With populations growing, inflation rising, and war costs draining state coffers, balancing the books became increasingly difficult. Raising taxes or cutting services was unpopular with voters, so legalizing the lottery seemed like a painless way to raise funds for a range of government services.

In addition to generating state revenue, the proceeds from the lottery also fund support centers for addiction recovery and gambling disorder, as well as enhancing state general funds for things like roadwork and public parks. Some states even offer “second-chance” drawings to allow players who did not win the big prize to try again with smaller prizes, such as concert tickets or scratch-off games. A significant portion of the pool, though, ends up going to the organizers in the form of expenses and profit, leaving a small percentage for winners.

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