The History of the Lottery


In the United States, people spend billions of dollars on lottery tickets every year. Many of these people are not just playing for fun; they believe that winning the lottery is their answer to a better life. While there are a few people who truly do win big, the odds of winning the jackpot are very low. In fact, most people who win the lottery end up going bankrupt within a few years. Instead, Americans should focus on saving money and establishing an emergency fund. They should also avoid using their lottery winnings to purchase expensive items.

Lotteries have a long history of use in the West, starting with the casting of lots for municipal repairs during the reign of Augustus Caesar and continuing through private games held by the d’Este family to distribute land in Italy and elsewhere. Francis I of France authorized public lotteries in 1520, and they spread throughout Europe as towns sought to raise money for fortifications and other needs.

The state legislation that establishes a lottery essentially grants a monopoly to the entity that runs it, allowing it to charge whatever prices it chooses (with the exception of taxes on winnings). Once established, most lotteries develop extensive specific constituencies, including convenience store operators (who buy large amounts of tickets); suppliers (heavy contributions by these organizations to state political campaigns are routinely reported); teachers (in those states in which a portion of revenues is earmarked for education); and state legislators (who become accustomed to receiving regular contributions from the game’s operators).

A key argument used to justify state lotteries is that the proceeds provide a source of “painless” revenue, without raising general tax rates or cutting public services. This argument is particularly effective in times of economic stress. However, research by Clotfelter and Cook shows that the actual fiscal condition of the state does not appear to have much influence on whether or when a lottery is adopted.

Lottery advertising typically portrays the experience of scratching a ticket as a pleasant, enjoyable activity, and emphasizes the high prizes offered in the various games. Such messages have been successful at generating considerable revenue for the industry, but they are misleading. They obscure the fact that the lottery is a serious form of gambling, and make it difficult for those who are not committed gamblers to distinguish between the entertainment value of the lottery and the disutility of losing money.

In addition, the advertising strategy focuses heavily on middle-income neighborhoods and excludes poorer people from participating at proportionally higher levels than their share of the population. As a result, most lottery players and winnings are drawn from the upper middle class. For these reasons, the lottery is a major contributor to inequality and may be considered an anti-social policy.