The Dangerous Underbelly of the Lottery
The lottery is one of the most popular gambling activities in America, and it contributes billions to state budgets. It has a long history, but its modern incarnation started in the nineteen-sixties, when burgeoning awareness of all the money to be made in the gambling business collided with a crisis in state funding. In those days, states that offered a generous social safety net found it difficult to balance their books without raising taxes or cutting services—both of which would have been instantly unpopular with voters. Lotteries offered an appealing alternative.
The basic elements of a lottery are fairly simple: First, there must be some way to record the identities and amounts staked by bettors. A second requirement is some mechanism to pool and shuffle these stakes into a large pot, which the organizers then draws from for prizes. Finally, there must be a set of rules that determine the frequency and size of prizes, as well as the costs and profits to the organization or sponsors.
But even with these fundamentals in place, lottery organizers have to make a number of other decisions to keep the game attractive and profitable. In particular, they must decide how much to pay out in prizes and what percentage of the total pool to allocate to winnings, and they must decide whether to offer a few large prizes or many smaller ones.
For bettors, the attraction of a lottery is usually rooted in an inherent desire to gamble and a belief that they have some small chance of becoming rich. But the odds are extremely low, and there’s a dangerous underbelly to it all. In a society of inequality and limited upward mobility, people who play the lottery buy into this myth that their luck—however improbable it might be—is their only shot at a better life.
Lottery commissions know all of this, and they try to counteract the regressive nature of the games by sending two key messages. The first is that they are fun, a good experience. And that’s true, at least in the short run. The other message, which they are very good at conveying, is that you should feel a sense of civic duty in buying a ticket.
While there is certainly a kernel of truth in this, it obscures the regressive nature of lotteries. The vast majority of the money they raise goes to paying winners, and it’s not enough to offset the regressive effect of the games on those who lose. In fact, if you’re a poor person, the chances of winning the lottery are actually worse than they are for middle-class and wealthy players. And that’s a shame, because it’s bad for the economy and it’s bad for society. Fortunately, there are solutions to this problem, which we’ll look at in our next article. Until then, happy lottery-playing!