Lottery is an activity where people draw a number and hope to win a prize. The first recorded examples were in the Low Countries in the fifteenth century, where towns held public lotteries to raise money for town fortifications and charity for the poor. Lotteries quickly spread to England, where Queen Elizabeth I chartered the country’s first national lottery in 1567 with proceeds designated for “reparation of the Havens and strength of the Realme.” Tickets were sold for ten shillings, which was an astronomical sum at the time. But if a person won the lottery, he or she was also entitled to immunity from arrest.
The lottery was once considered a great way for state governments to generate revenue without raising taxes, a prospect that was politically unpalatable in many parts of the United States. According to Cohen, in the late nineteenth and twentieth centuries the popularity of state-run lotteries soared as politicians portrayed them as “budgetary miracles, the chance for states to make revenue appear seemingly out of thin air.”
It’s true that lottery revenues have provided a lifeline for some cash-strapped states, but it’s equally true that this income source has had little effect on overall state budgets. In fact, a study by Clotfelter and Cook shows that a state’s objective fiscal condition does not play much of a role in its adoption of lotteries.
In addition to their role as a source of state funds, lotteries are marketed as a way for citizens to feel like they’re doing their civic duty by buying a ticket. This message appears to be particularly effective during times of economic distress, when it’s easy to sell the idea that lottery proceeds will help reduce cuts to education or other public services. But even in good times, the benefits of lotteries remain largely unclear to citizens.
There’s no question that some people simply like to gamble. But it’s also true that the rich, on average, spend a much smaller percentage of their income on lottery tickets than do the poor. Moreover, the wealthy are far more likely to purchase tickets when jackpots are at or near a record level.
Of course, if an individual’s expected utility of a monetary loss is outweighed by the entertainment value (or other non-monetary benefit) obtained from playing the lottery, then it might be rational for him or her to purchase a ticket. And of course, the probability that a particular number will be drawn is entirely dependent on random chance. This is why it’s so difficult to understand the phenomenon of certain numbers being more or less frequent than others. But that’s the point of the game – you can’t predict what numbers will be chosen, you have to trust in luck. And for many, that’s just enough of a reason to keep on playing.