The Problems of Lottery

Lottery is a type of gambling in which numbers are drawn to win a prize. In the United States, state and national lotteries operate games of chance, including instant-win scratch-off tickets, daily lotto games and games that involve picking numbers to win a prize (often six numbers). A small percentage of ticket sales is deducted for organizing and promoting the lottery, and another percentage goes as prizes and profits to winners.

Lotteries have become a staple of modern state government, but they are not without their problems. The lottery industry relies on the fact that, for most people, the entertainment value of winning is greater than the disutility of losing. It’s an ingenious way to increase revenue that a state might not otherwise be able to raise.

The modern lottery began, Cohen writes, in the nineteen-sixties when America’s postwar economic boom began to crumble under inflation and the cost of the Vietnam War. States that had built generous social safety nets found it difficult to balance their budgets unless they raised taxes or cut services, which would be unpopular with voters.

Lotteries seemed to offer a solution: they could increase state revenues while maintaining popular services and avoiding an anti-tax backlash. Initially, the lottery grew rapidly, but it soon plateaued. To sustain growth, the lottery industry shifted to new games and more aggressive advertising. Its advertising strategy is similar to that of tobacco or video-game companies, and its products are most heavily promoted in neighborhoods with disproportionately low incomes.