The History of the Lottery


The lottery is the most popular form of gambling in America. People spend about $100 billion on tickets each year, and states promote them as a way to raise revenue for things like schools. But the actual amount of money generated by lotteries is relatively small compared to other state sources, and it’s not clear whether the benefits outweigh the costs.

In this week’s essay, Michael Cohen looks at the history of lotteries and their effects on society. He points out that lotteries are highly responsive to economic fluctuation. They increase when incomes decline or unemployment rise, and they are heavily promoted in communities that are disproportionately poor or black. They are also regressive, with the odds of winning a prize being much worse for lower-income people.

People have been casting lots for centuries. The Old Testament instructs Moses to divide land by lottery, and Roman emperors used them to give away property and slaves. In America, the first public lotteries were held in the early colonies to fund construction projects, and a series of state-run lotteries helped finance Harvard and Yale.

In the late twentieth century, when states were looking for ways to raise revenue that wouldn’t anger their anti-tax electorate, the lotteries resurfaced. As the odds of winning have become increasingly skewed, their popularity has grown. To some, this may seem counterintuitive, but the fact is that even if a person’s chances of winning are one in three million, they still want to play. The entertainment value or other non-monetary benefit of the ticket may outweigh the disutility of losing, making it a rational choice for them to do so.