A lottery is a game in which a random drawing determines a prize. People who win often have to pay taxes, which can eat up half the winnings. Moreover, they often go broke in a short time. In the US, Americans spend over $80 billion a year on lotteries. This money would be better used to build an emergency fund or pay off credit card debts. Despite the drawbacks of a lottery, many people still buy tickets for it. Here are a few reasons why:
While there is a certain inextricable human impulse to play lotteries, it’s important to understand what lottery marketers are doing when they push for state-run games. They are not only playing on a universal fear of missing out, but also exploiting the psychology of addiction and the power of reward. From the design of lottery ads to the math behind the tickets themselves, they are consciously trying to keep us coming back for more.
The lottery first appeared in Europe in the fifteenth century, when towns began using it to raise money to fortify town defenses and to aid the poor. It soon spread to America, where it grew in popularity during the colonial period. It became so popular that some early American politicians, such as Thomas Jefferson and Alexander Hamilton, endorsed it. Others did not, arguing that the lottery compelled people to gamble away their land or even their lives.
In addition to the money, people who participate in a lottery believe that they are doing their civic duty by supporting their government. This is not entirely untrue, Cohen writes, but it’s misleading. The fact is that the average lottery ticket does not make much of a contribution to overall state revenue, and it does even less for education, health care, or public safety. Most of the proceeds are spent on advertising and prizes.
For some states, the lottery is an essential source of revenue. But for most, it is just a way to avoid raising taxes or cutting services. As America’s prosperity crumbled in the nineteen-sixties, with inflation and the cost of Vietnam on the rise, these states had to decide between raising taxes or cutting services. They chose the latter option.
In the nineteen-eighties, as California passed Proposition 13, and Ronald Reagan was in the White House, that arrangement began to unravel. As lottery profits fell, the state could no longer maintain its expansive social safety net, and balancing budgets became difficult without raising taxes or cutting services. The result was that the lottery became a crucial state revenue source, especially in the Northeast and Rust Belt. And, as Cohen argues, this was not simply because the lottery was fun to play; it was seen as a way to escape the pain of taxation. This is why lottery advocates rely so heavily on the message that even if you lose, you are doing your civic duty by buying a ticket. It’s a strange and perverse way to sell a product.