Lottery might seem like a child of the modern culture that gave us Instagram and the Kardashians, but it has roots as deep as the concept of fate itself. It has been used for centuries to distribute wealth, and it still holds a strong grip on many people’s imaginations. Its appeal owes to both the promise of a big windfall and to our fundamental beliefs in meritocracy. In fact, the lottery might be the most visible manifestation of our enduring belief that anyone can win.
There are three basic requirements for a lottery: (1) A large pool of prizes must be offered; (2) winners must be randomly selected; and (3) the odds of winning must be sufficiently high to make participation worthwhile. Those rules have been met by state and private lotteries for thousands of years, and it’s no coincidence that the oldest lottery is in the Netherlands.
In order to sustain their popularity, lotteries must pay out a substantial portion of ticket sales in prizes. That reduces the amount of money that’s available for other purposes, including state revenue and earmarked expenditures like education. It also means that lottery revenues aren’t nearly as transparent as a standard tax, so consumers don’t fully realize that they’re handing over a percentage of their paychecks to the state.
Despite these downsides, lotteries continue to attract broad public support. In most states with lotteries, at least 60% of adults report playing at some point in their lives. Lotteries can be especially popular in times of economic stress, when they are portrayed as a painless alternative to raising taxes or cutting essential services. But studies have found that the popularity of lotteries doesn’t correlate with a state government’s objective fiscal health; in fact, it tends to increase when there isn’t a pressing need for new revenue sources.
The success of lotteries depends on their ability to lure players with big jackpots and apparently newsworthy results. Super-sized jackpots are not only the lure that drives ticket sales, but they also earn lotteries a windfall of free publicity on news websites and television. In addition, they can prompt a rollover, driving up the size of the next jackpot even further.
A major issue with lotteries is that they create a false sense of fairness. The vast majority of tickets are purchased in middle- and upper-income neighborhoods, but they only account for a small proportion of the total prizes. The remaining prize pools are skewed toward larger amounts, and the winners can be expected to pay significant federal and state taxes.
Moreover, lotteries are often designed with the intention of attracting players from specific constituencies: convenience store owners (lottery ads can be seen on their signage); suppliers (heavy contributions to state political campaigns are regularly reported); teachers (lottery revenue is earmarked for education); and so on. This concentration can result in a lack of diversity among the winners and the overall population, which is not a great thing to promote.