People in the US spent over $100 billion on lottery tickets in 2021, making it the most popular form of gambling. State lotteries are a huge business, and the public is broadly supportive of them. Politicians and state budgeters promote lotteries as a painless source of revenue, and people buy into that story, ignoring the enormous costs. But just how much revenue is generated by the lottery, how that money is used, and whether it’s really worth the trade-off to people losing their money are questions that deserve more attention.
A lottery involves selecting a set of numbers or symbols on a ticket, and then drawing them in order to determine winners. Prizes can be a small cash amount, free tickets or merchandise, and even cars and houses. The odds of winning depend on how many people participate, how much is sold, and the number combinations selected. But the odds are always very low.
In the US, about 50%-60% of lottery proceeds go toward prizes, with the rest divvied up among administrative and vendor expenses, and whatever projects each state designates. Some states use all or part of their proceeds to fund education, but others earmark it for things like roads and bridges.
The practice of making decisions or determining fates by casting lots has a long history, with several instances recorded in the Bible. But lotteries offering tickets for material gain are of more recent origin, with the first recorded public lottery taking place in Bruges, Belgium, in 1466, to raise funds for town repairs.
Most of the time, the decision to adopt a lottery is made by elected officials in a state. There are a few exceptions, but the process is almost always very similar: politicians and their staffers put together a plan for how to raise money (often focusing on education), lobbying groups pitch in support, and the lotteries become law.
State governments have been able to sell the idea of a lottery because it appeals to a deep and widespread human impulse. There is a strong desire to have the opportunity for quick riches, and when it’s offered in a way that feels safe and easy to control, people will go all in. Billboards, radio commercials, and TV ads all reinforce the message that playing the lottery is a fun, harmless way to gamble.
There are some important differences between the states that have adopted lotteries, however. For one, they all have very different socioeconomic profiles, with men and blacks more likely to play than whites, and the young and old playing less than the middle-aged. Lottery revenue also varies by income level, though not as dramatically as with other forms of gambling.