Is the Lottery a Bad Thing?


The lottery is one of America’s most popular pastimes, with Americans spending over $80 billion per year on tickets. While it’s fun to play, it is important to remember that the lottery is a form of gambling and should be treated as such. It is important to set a budget for how much you are willing to spend and stick to it. This way, you will not be disappointed if you don’t win and you can save the money for other things like an emergency fund or to pay off credit card debt.

The term “lottery” comes from the Middle Dutch word lotijne or loterie, meaning “action of drawing lots.” The practice began in Europe in the fifteenth century as various towns held private and public lotteries to raise funds for town fortifications, to help the poor, and for other purposes. It was brought to the United States in 1612 when King James I of England established a lottery to fund the settlement at Jamestown, Virginia, the first permanent British colony in America.

Today, state governments establish a monopoly for their lotteries by statute; hire a public agency or corporation to run the operation (as opposed to licensing a private firm in return for a share of the profits); start with a modest number of relatively simple games; and, under pressure for additional revenues, progressively expand the lottery by adding new games. Each expansion increases the number of winners and thereby generates additional revenue.

For many people, the purchase of a lottery ticket has a positive expected utility; the entertainment value or other non-monetary benefits outweigh the cost of the ticket and the possibility that they will lose. But the regressivity of the lottery means that for the poorest residents, who are also more likely to be frequent players, there is a negative expected utility from playing.

A common argument is that the lottery creates a new source of tax revenue for state governments, helping them to provide services that would otherwise be difficult or impossible to do. But there are other ways to increase revenue that do not impose significant costs on the poor and working class, such as raising marginal income taxes or expanding tax deductions for the middle class.

It is hard to imagine how a lottery could be viewed as anything other than a bad thing, but there are some people who have a clear understanding of the odds and play the lottery with the hope that they will change their lives. I have talked to many such people, including some who have spent $50 or $100 a week for years. They tell me that they have quote-unquote systems based on lucky numbers and shopping at certain stores or at certain times of the day, but they all accept that the odds are long and that they are, implicitly, getting duped. In their minds, however, the lottery is their last, best, or only chance at a better life.