Lottery is not the most popular pastime in America, but it remains an industry of staggering proportions. Americans spend more than $80 billion on it each year, yet the odds of winning are astronomical. Some people play for the money, while others have a more altruistic motive – they believe that they are one of those lucky few who will win a jackpot that can change their life. Regardless of their reasons, everyone can benefit from understanding the rules of probability that govern the lottery.
Lotteries are based on the ancient practice of casting lots. They were popular in the Roman Empire (Nero was a big fan) and in the Bible, where they are used for everything from selecting kings to divining God’s will. More recently, state-run lotteries have become a favored source of revenue for state governments. In the nineteen-sixties, when rising inflation and war costs wiped out federal funds, states scrambled to balance their budgets. Lotteries looked like a solution: they could bring in hundreds of millions of dollars, and politicians would be spared from the thorny subject of raising taxes.
Cohen describes how lotteries became a state’s “budgetary miracle.” The premise is simple: people buy tickets for a tiny chance to win big. And in the case of state lotteries, the prize is typically a lump sum of tax-deductible cash. It’s not hard to see why politicians embraced this idea: it allowed them to raise money without the thorny political process of raising taxes, and it gave voters the illusion that they were getting something for free.
But a closer look at the numbers reveals a darker side to this game. Lottery revenue is highly responsive to economic fluctuations: sales increase as incomes fall, unemployment rises, and poverty rates climb. And like all commercial products, lotteries are designed to addict consumers: advertising and the look of the ticket encourage repeat purchases. And just like the marketing strategies of tobacco companies and video-game makers, state-run lotteries aren’t above playing on our psychological weaknesses.
Moreover, lottery money is rarely enough to pay for the services it promises. In fact, it tends to crowd out other sources of revenue, such as income and sales taxes, which are the only ways to make sure government programs continue to operate at their current levels.
Finally, because state lotteries are primarily advertised to African American communities, many white voters support them with the rationale that if Blacks are going to gamble anyway, the government might as well reap the profits. This argument is flawed in multiple ways, but it gives a veneer of morality to a scheme that often fails to deliver on its promises. It also ignores the way that state-run lotteries have tangled with the slave trade, including the fact that a former enslaved man purchased his freedom with winnings from the South Carolina lottery and went on to foment a slave rebellion. This article originally appeared on the New York Times.