A lottery is a game of chance where winners are selected through a random drawing. Financial lotteries are run by state or national governments. People purchase tickets for a small price and have a chance to win large sums of money, sometimes millions.
This article is designed to help kids & teens understand the odds and the concept behind a lottery. It can be used as a money & personal finance lesson plan, and also fits into the K-12 curriculum for Financial Literacy.
The term “lottery” may be derived from the Dutch word lot (“fate”) or from Middle Dutch Loterie, perhaps via French loterie (a lottery) and Old English tygrn (to toss a coin). The first European public lotteries in the modern sense of the term were held in the Low Countries in the 15th century, when towns would hold games to raise funds for town fortifications and to help the poor.
Lotteries today still rely on the message that even if you don’t win, the fact that you bought a ticket means you should feel good because you did your civic duty to help the children of the state or whatever. In reality, though, the percentage of overall state revenue that lotteries bring in is quite low. I’ve never seen a study that really puts this in context, but it’s something to bear in mind when you see the big billboards on the highway advertising the huge jackpots for Powerball and Mega Millions.