A lottery is a form of gambling in which people purchase numbered tickets and the numbers are drawn to determine a winner. If you win the lottery, you get a prize, which is usually money, but it can also be goods or services. Unlike most forms of gambling, the lottery is purely a game of chance and is not based on skill. The term lottery is derived from the Middle Dutch word loterie, which may have been a calque of the French word loterie or perhaps the Latin lttere “fate, fortune.”
The Modern Lottery
After World War II, states could expand their social safety nets without especially onerous taxes on the working class and middle class. But in the nineteen sixties, this arrangement began to unravel due to soaring inflation and the cost of the Vietnam War, and state government budgets became unsustainable. Politicians faced a choice: they could raise taxes or cut services, but both options were highly unpopular with voters. Lotteries appeared as a miracle cure, allowing politicians to raise and spend large amounts of money seemingly out of thin air without arousing voter opposition.
The lottery was a huge success, with some states making more than $1 billion per year from the games. But, as Cohen argues, the popularity of the lottery was not simply a response to fiscal crisis. It was also a popular form of entertainment that has roots in ancient times. The Old Testament, for instance, instructs Moses to distribute land by lot; and the Roman emperors used lotteries as an entertainment at dinner parties called apophoreta.
In addition, the lottery offers a unique way to provide pleasure for an enormous number of people. Many people enjoy the elation of winning a small sum, while others find the excitement of being in the running for a big prize to be very gratifying. The social aspect of the lottery is what makes it so enticing, as shown by the popularity of games such as Powerball and Mega Millions.
But a major challenge is how to manage the lottery’s social costs and ensure that the proceeds are used wisely. The key, according to Cohen, is to understand what motivates people to play the lottery. He identifies three main factors:
For some, he says, a ticket is an investment in themselves. They buy it because it will improve their life in some way, whether by giving them more money or through a non-monetary benefit such as a better job.
In these cases, the disutility of a monetary loss is outweighed by the expected utility of a monetary or non-monetary gain, which is why people continue to buy tickets even though they know the odds are long. Others, however, are more irrational about their gambling. These people go in with their eyes wide open and are often convinced that they have a system, based on quote-unquote logic that is not borne out by statistical reasoning, about lucky numbers and stores and what kinds of tickets to buy.