In the United States, state-run lotteries dish out cash prizes to paying participants whose numbers match those picked at random by machines. The winners must be a certain age to collect the prize money (normally, 18 or older), pass a background check and sign a statement of understanding that they are not trying to game the system, are not addicted to gambling and will never use it for illegal activities. Lottery prizes can range from a small number of units in a subsidized housing complex to kindergarten placements at a public school.
In its modern incarnation, the lottery is one of America’s more popular forms of gambling. But it is not a pure game of chance, as the history of its origins shows. Lotteries were once a common form of fundraising for local needs, such as building a church or purchasing a slave. They also were used to distribute land or other property rights, or to fund the military and other public services. The drawing of lots to determine ownership or other rights is recorded in ancient documents and throughout the Bible, and lotteries were once quite common in Europe and elsewhere.
During the seventeenth and eighteenth centuries, lotteries were a major way to bring in new people to European colonies, especially to America, and to help them get settled. The first American lottery was held in Massachusetts in 1745, despite strong Protestant prohibitions against gambling. Its success helped to finance the settlement of Virginia, the Carolinas and the other colonies.
After World War II, the popularity of lotteries grew along with the growth in government spending and inflation. Lotteries provided states with a way to expand their social safety nets without the heavy burden of taxes on working-class and middle-class citizens. By the late nineteen-sixties, however, as inflation continued to run wild and the cost of the Vietnam War began to erode America’s prosperity, that arrangement was beginning to crumble.
It was at that point that the lottery industry started to change, argues Richard Cohen. Suddenly, growing awareness of all the money to be made in the gambling business collided with a crisis in state funding. The result was that in the early nineteen-seventies, lottery commissions decided to raise jackpots and lower odds of winning.
High-profile jackpots not only boost ticket sales but give the games a windfall of free publicity on news websites and on television. So if the top prize isn’t won in the initial drawing, it will carry over to the next, thus increasing its size and the chance that it will be won in the future.
It’s a remarkably deceptive strategy, but it has worked. Today, the average American spends more than three dollars a week on tickets. Nearly 186,000 retailers sell them, including convenience stores, supermarkets, gas stations, restaurants and bars, service stations and bowling alleys. Most of these retailers make more money selling scratch-off tickets than they do selling the more costly pull-tabs.