A lottery is a game in which numbers are drawn at random for a prize. Many governments outlaw lotteries, while others endorse them and organize state or national contests. Lottery games are often advertised on billboards, television, radio, and the internet. The prizes can be cash, goods or services. In the United States, lottery proceeds go mostly to public services and education. In some countries, lottery revenue is also used for other purposes, such as subsidized housing, public works, and charitable causes.
The history of lotteries spans centuries and continents, from Moses’s census of Israel to Roman emperors giving away slaves. In the US, the lottery first gained popularity in the nineteen-sixties when a burgeoning population and rising inflation strained state budgets. As the era’s tax revolt intensified, states found themselves unable to balance their budgets without raising taxes or cutting services—both options wildly unpopular with voters. In this context, the lottery offered a shrewd way to raise needed funds while still avoiding high taxes and painful cuts to social programs.
Initially, lotteries were little more than traditional raffles. People bought tickets for a drawing at some future date, usually weeks or months. But innovation in the 1970s transformed the industry. Suddenly, lotteries could be played by buying “instant” tickets, which were printed with lower prize amounts but higher odds of winning—on the order of 1 in 4. As a result, revenues quickly expanded and continued to grow until, in Cohen’s words, they began to “plateau.”
To keep up with this growth, lotteries must continually introduce new games to keep their base of players interested. But this is not always possible. For many regular lottery participants, the prospect of an improbable jackpot has lost its thrill. As a consequence, their ticket purchases may no longer represent a rational choice.
In the case of those who do win, they are often hounded by debt collectors and have to pay large tax bills. The experience can even have a negative psychological effect, making them less likely to take another chance.
This is a serious issue for the gambling industry, which is already facing declining interest among consumers. As a result, some states have begun to restrict new types of games and limit advertising.
Some critics of the lottery argue that it’s a morally ambiguous practice. Others say it’s simply a marketing strategy for a business that relies on skewed incentives. But the bottom line is that lottery profits depend on the same basic economic principles as other gambling industries.
In this piece, Cohen argues that the lottery is not only a blatant marketing strategy but a fundamentally unequal proposition. Those who buy tickets are not only speculating on a long shot, they are also betting against the chances of those around them. The fact that lottery revenue continues to expand while wages have stagnated means that the majority of Americans are losing money on this bet. This makes it a profoundly unfair and exploitative enterprise.