In the United States alone, people play lotteries worth billions of dollars each year. Though some players do this out of pure entertainment, most believe that winning will improve their lives in a number of ways. These individuals are not stupid: They know that the odds of winning are very low. They also know that the money they spend on tickets is irrational. Despite this, they continue to play the lottery because it is their last, best, or only chance at a better life.
The idea of drawing lots to determine property distribution or to award prizes has a long history, stretching all the way back to biblical times. Moses, the Bible’s author of the law, distributed land among the Israelites by lot, as did Roman emperors. Even a popular dinner entertainment in ancient Rome, called the apophoreta, involved drawing lots to decide on prizes for guests to take home with them.
Historically, lottery games have been a way for state governments to raise funds without raising taxes. But in the nineteen sixties, as inflation and the cost of the Vietnam War began to strain state budgets, this arrangement became untenable. The states, which had built a broad array of social safety net services, found that they could no longer keep up with rising costs without increasing taxes or cutting services.
A solution was needed, and the lottery was devised as a painless alternative to taxation. Privately organized lotteries were widespread in England and the American colonies by the 17th century; Benjamin Franklin held a lottery to raise funds for cannons during the Revolution, and the Continental Congress established a state-run lottery in 1776.
Today’s state lotteries, however, operate very differently from those in the past. Generally, the state establishes a monopoly, sets up a public corporation to run the game, and begins operations with a relatively modest number of games. Then, under pressure to raise revenue, they progressively expand the scope of the game and add more games.
Initially, many voters and political leaders supported the idea of lotteries because they believed that these games would not increase state gambling, but as lottery games grew in popularity and revenues soared, more and more people were drawn to them as a way to gamble. The fact that the odds of winning were very low did not deter them; in fact, some people preferred to gamble on a lottery rather than a casino, because they felt it was more fair.
In a sense, the lottery has become a classic example of how state policy is often made piecemeal and incrementally. Lottery officials rarely have a holistic view of the gaming industry, and their decisions are driven by specific constituencies such as convenience store owners (who provide advertising space); lottery suppliers (heavy contributions to state political campaigns are frequently reported); teachers (whose salaries are earmarked from lottery revenues); etc. As a result, few state lotteries have any coherent “gambling policies.”