The Truth About the Lottery

The lottery, that great gamble where you pay for a ticket, select numbers and hope to win a prize, is one of the oldest and most widespread forms of gambling in the world. It’s also a major source of state revenue, and it’s an object of endless debate.

Lotteries have a long history in the United States, and their popularity grew during the nation’s early days, even despite strict Protestant prohibitions against gambling. They helped finance the settlement of the American colonies, and they were used to distribute everything from town fortifications to land grants and charity funds. They were tangled up with slavery—George Washington managed a lottery that offered human beings as prizes, and a formerly enslaved man named Denmark Vesey purchased his freedom through a South Carolina lottery and went on to foment slave rebellions.

In modern times, lotteries have become a mainstay of state budgets, and they’re one of the few ways that politicians can raise money without getting punished at the polls. For many people, the lottery is a form of irrational gambling, but it also carries with it a sliver of hope—the idea that somebody, somewhere, will hit the big jackpot and change their lives for good.

The odds of winning the top prize are extraordinarily long—as is the case with most forms of gambling—but that doesn’t deter many people from participating. And, as a result, the prize pools of these games have grown to enormous sizes, earning them a windfall of free publicity on newscasts and websites. The big jackpots also help drive sales, with tickets sold at the rate of hundreds of millions of dollars a week, often in multiple currencies.

State officials, meanwhile, promote the lottery as a budget miracle that lets them maintain services without raising taxes and thus risking defeat at the polls. That’s a slick argument, but it doesn’t stand up to scrutiny. Lottery advocates point to the comparatively low percentage of the prize pool that goes to the state, and they tell voters that buying a ticket is a kind of civic duty, like supporting your local library or donating to charity.

But the truth is that most state lotteries are rife with distortions and inequalities. For starters, the poor participate in lotteries at levels far below their proportion of the population. Clotfelter and Cook note that the majority of lottery players and revenues come from middle-income neighborhoods, while those in high-income areas are much less likely to play. A lottery’s “fairness” is a function of how random the selection process is, and a truly fair drawing would have each row and column appearing the same number of times as the other. The plot above, for example, has almost the same amount of green (awards) in each cell because each row was awarded the same number of positions a disproportionately small number of times. The color of each column reflects the number of applications that received that position.