The Troubles of Playing the Lottery
Lotteries are a popular form of public finance, raising money for all kinds of projects, from paving streets to building universities. Their popularity is no mystery: they are simple to organize, easy to play and offer the prospect of winning a large sum of money. But there are troubling things about lotteries that the public should be aware of before deciding to play.
The casting of lots to make decisions and determine fates has a long record in human history, including several instances in the Bible. The first recorded public lottery to distribute prize money was held in the reign of Augustus Caesar for municipal repairs in Rome. The word “lottery” is thought to be derived from the Dutch noun lot, which means fate or fortune. The lottery has a surprisingly strong presence in American history: the Continental Congress voted to establish a national lottery to raise funds for the revolution, and state lotteries are now legal in 37 states and the District of Columbia.
Almost all states hold lottery games, but the way they operate varies. Generally, a state legislates a monopoly for itself; establishes a state agency or public corporation to run it (instead of licensing a private firm in return for a share of the profits); begins operations with a modest number of relatively simple games; and then, under pressure to increase revenues, progressively expands its offerings in size and complexity.
Most states also limit the amount of money that can be won in any one drawing. This prevents people from putting all their money on the most improbable ticket and then complaining that they have no chance of winning. But it also reduces the odds of winning, making it more difficult to win a big jackpot.
The most common way to improve your odds of winning is by playing multiple tickets. You can do this either by purchasing a ticket on your own or joining a syndicate. A syndicate involves a group of players who pool their money to purchase large numbers of tickets. By doing so, you can improve your chances of winning, but your payout each time will be less (because the number of tickets increases, the amount that you are paid for each winner decreases).
Lottery advertising focuses on promoting the jackpot amounts, and there is evidence that the poor participate in the lottery at rates that are disproportionately lower than their percentage of the population. Critics charge that the advertisements are deceptive, presenting misleading information about the odds of winning, inflating the value of the money won (lottery jackpots are usually paid out in equal annual installments over 20 years, which is dramatically eroded by inflation and taxes); and so on.
Some critics also argue that the state should not be in the business of promoting gambling. They point out that while gambling may cause problems in individual cases, it is not nearly as harmful to society as alcohol and tobacco, two other vices that governments tax to raise revenue.