Lotteries are games of chance in which numbers or symbols are drawn for prizes ranging from cash to goods and services. They have existed for centuries. In fact, the Old Testament instructs Moses to take a census of the Israelites and divide land by lot, and Roman emperors used them for giving away property and slaves. In the early American colonies, lotteries were a common source of funds for all sorts of public uses. They also proved popular with the colonists, despite strong Protestant proscription against gambling.
In modern times, lottery games are typically run by state governments or private corporations that contract with the government to conduct the draws. Players pay a small amount of money (typically $1) to participate in a drawing and then win a prize if their numbers match those drawn at random. Prizes can range from a few dollars to large sums of cash, or in the case of state-sponsored lotteries, a wide variety of goods and services, such as housing units or kindergarten placements.
For many people, winning a lottery is a form of recreation and a way to pass the time. But for some, winning a lottery can be very serious business. If you’re lucky enough to hit the jackpot, you’ll need to make sure you do everything you can to protect your newfound wealth, from vultures and saviors alike. Experts recommend surrounding yourself with a team of lawyers and financial advisers to keep the bad guys at bay.
There’s an inextricable human impulse to gamble. It’s part of the reason why billboards offering Mega Millions or Powerball payouts are so compelling. But there’s a lot more going on behind those ads. For one thing, they’re dangling the promise of instant riches in an era of inequality and limited social mobility.
In 1964, New Hampshire became the first state to establish a lottery. But it wasn’t the only one: a whole host of states followed suit, all in the Northeast and Rust Belt, where state governments were trying to maintain services while avoiding the unpleasant topic of raising taxes. As Cohen puts it, legislators believed that the lottery was a “budgetary miracle” that would enable them to do just that—while keeping their tax rates low and appeasing anti-tax voters.
For a rational individual, the purchase of a ticket in a lottery is likely to produce a positive utility if the entertainment value outweighs the disutility of the monetary loss. But the odds of winning a lottery are much too long to make the purchase a good investment for most people. In other words, there’s an ugly underbelly to these games. It’s not just that they can be addictive, it’s that they’re often rigged. And that’s a problem for everyone.