The Truth About the Lottery


Lottery is the procedure for allocating something (usually money or prizes) among a class of people by drawing lots. The word is likely derived from the Dutch noun lotte, meaning ‘fate’, but it can also refer to a specific prize-giving arrangement based on chance. Lotteries were popular in the Low Countries during the 15th century, when town records show them used to raise funds for walls and town fortifications or help poor residents. The Continental Congress established a lottery in 1776 to fund the American Revolution; it failed, but small public lotteries continued to be common as mechanisms for collecting “voluntary taxes”.

The money raised by state lotteries is a drop in the bucket in terms of overall state revenue and is not targeted at poor or working-class citizens. It is not an efficient way to raise tax revenues. Instead, it obscures the regressivity of government spending, encourages people to gamble, and gives some people a false sense that they are doing a good thing by buying tickets.

In fact, state governments are inefficiently collecting taxes, with as much as 40 percent of the total prize money going to administrative costs, such as ticket sales and enforcement. That leaves states with less money to invest in education, health care, and other essential services.

Yet many people continue to play the lottery. I have talked with a number of them, including people who have been playing for years, spending $50 or $100 a week. Yes, they have all sorts of quote-unquote systems, and they know the odds are long, but they also believe that a few minutes, hours, or days spent dreaming about winning is worth the irrational risk.