The History of the Lottery


In a lottery, people pay a small sum of money to try to win a larger prize. The winner can choose to receive the cash as a lump sum or as an annuity, which gives them regular payments over time. The amount of the payouts and how they are structured depend on state rules. The lottery is a form of gambling, but it is legal in most countries.

Lotteries are often marketed as a way to fund government services, such as education or social welfare programs. In truth, however, they are a massive tax on the poor and working class. They take billions of dollars out of the pockets of people who could be saving for retirement, buying a home, or sending their children to college. In return, the lottery rewards a few people who happen to be lucky enough to buy tickets.

The first recorded lotteries began in the Low Countries in the fifteenth century, with local towns raising funds for public works and helping the needy through the sale of tickets. The winning numbers were chosen through a process that relied entirely on chance. The prize amounts varied, but the winners were always very few.

In America, the lottery’s golden age coincided with a decline in financial security for most of the working population. In the nineteen-seventies and eighties, wages stagnated, unemployment rose, health-care costs spiraled, and pensions eroded. For most of the baby boom generation, the promise that hard work and education would allow them to improve their lives was starting to look a bit hollow.

During this period, state governments faced growing deficits caused by inflation, population growth, and the Vietnam War. To balance their budgets, politicians needed either to raise taxes or cut services. Both options were unpopular with voters, so states turned to the lottery in hopes of generating revenue without upsetting the electorate.

Cohen argues that the modern incarnation of the lottery started in the nineteen-sixties, when an obsession with “unimaginable wealth” collided with a fiscal crisis in state finances. As the middle class sank into relative poverty, and public services dwindled, state leaders began to see the lottery as a budgetary miracle—the perfect solution for balancing their books that did not require them to confront their constituents’ aversion to taxes.

To make their case for the lottery’s merits, its proponents stopped arguing that it would float an entire state’s budget and instead focused on one line item—usually education or social-service programs. This strategy was shrewd for several reasons. For one, it made it easier for proponents to campaign for legalization. They no longer had to sell the lottery as a silver bullet for the entire state; all they had to do was convince people that the lottery would help them. And it worked: In nearly every state, lotteries have become a fixture of the political landscape. In fact, they may be the most successful of all government marketing campaigns. The reason for this is simple: People want to believe they’re making a prudent choice when they spend their dollars on a ticket.