What is a Lottery?

A lottery is a way to distribute prizes by drawing numbers from among those who submit entries. A typical modern lottery involves an organization that sells tickets, records the identities and stakes of each bettor, and then draws winning numbers. Each bettor writes his name and the amount of money he bets on a ticket, which is then either deposited with the organization for shuffling and possible selection in the draw or retained by the bettor until the winner is announced.

Lotteries are one of the most widespread and popular forms of gambling in the world, and have become especially prominent in America since the mid-nineteenth century. They have proven to be a potent political force, and have helped fuel a national fascination with chance and fate. Whether they are viewed as a benign form of entertainment, or a source of evil, they have had an enormous impact on the fabric of American life.

In the nineteenth and twentieth centuries, lotteries became a major source of state revenue as governments faced budget crises that threatened social safety nets and other public services. As Cohen shows, these crises were often caused by inflation, population growth, wars, and other factors that made it difficult for states to balance their budgets without raising taxes or cutting services, which were highly unpopular with voters.

At the same time, many people seemed to have a built-in desire to gamble. Lotteries offered them a low-risk opportunity to make a little money and, at the same time, reinforce beliefs that they were meritocratic and had a fair shot at becoming wealthy in a society with limited economic mobility.

Initially, state lotteries were little more than traditional raffles, with people purchasing tickets to enter a future drawing. But innovations in the 1970s gave the industry a huge boost. First came the introduction of scratch-off tickets, which required less money to purchase and thereby increased the chances of winning. Then came the expansion of prize amounts and the introduction of new games, such as keno and video poker, which had lower prizes but much higher odds of winning.

These changes in lottery design were driven by a need to generate more winners and to increase the total amount of money that could be awarded. The more money that could be won, the more attractive the lottery became. But, as the author points out, the initial brisk rise in lottery revenues eventually leveled off and even began to decline. The only way to maintain or increase these revenues was to introduce new games and expand promotional efforts.

Despite the success of these new games, the old problems remain. For example, although they are aimed at the general population, most lottery players come from middle-income neighborhoods and far fewer from high-income ones. Also, federal tax laws take out 24 percent of winnings, so that by the time a lottery player actually receives his prize, it may be closer to half of its original value.