The History of the Lottery


A lottery is a game of chance in which winnings are determined by drawing lots. It is considered to be the most popular form of gambling in the United States, generating billions of dollars in revenue annually. Despite its low odds of winning, many people play the lottery in hopes of improving their lives or finding financial security. Nevertheless, the lottery has received criticism for preying on disadvantaged groups, and it is often viewed as a “tax on the stupid.” Its supporters argue that players do not understand how unlikely it is to win, or that they enjoy playing the game anyway. Regardless of its merits, the lottery remains an important part of American society and should be studied for its influence on behavior.

Lotteries have long been a popular means of raising funds for government projects. The first known records of lotteries are keno slips, which were used in the Chinese Han dynasty between 205 and 187 BC to fund public works projects. These later gave way to paper tickets, which were first introduced in the fourteenth century. Initially, ticket prices were low and the prizes were small, but over time the prize amounts increased and the tickets became more widespread.

In the modern era, the lottery is an integral part of state and municipal finance, accounting for some of the highest revenue streams in all of government. While there are a variety of different types of lotteries, they all share several common elements:

The lottery’s most basic feature is the pooling of money paid for tickets into a fund from which the winners are selected. Normally, the pool is thoroughly mixed by some mechanical method (such as shaking or tossing), and then a random selection process determines the winners. The prize funds may be awarded in the form of cash or merchandise, or a combination of both. Some of the pool is deducted for the costs of promoting and running the lottery, and a percentage is usually set aside as profits and revenues.

Cohen argues that the modern incarnation of the lottery emerged in the nineteen-sixties, when a growing awareness of the money to be made in the gambling business collided with a crisis in state funding. With the rise in unemployment and inflation and the increasing cost of war and social welfare programs, balancing budgets for state governments became increasingly difficult. For politicians who wanted to preserve existing services but were afraid of angering an anti-tax electorate, the lottery appeared to be a budgetary miracle.

Although there is little evidence that the lottery has any skill-based components, its popularity continues to grow in the face of an economic downturn. In fact, sales increase when incomes fall, unemployment rates rise, and poverty rates increase. Moreover, lottery products are often marketed in neighborhoods that are disproportionately poor, black, or Latino. In short, the lottery is a classic example of how social conventions can subvert rational thinking.