The lottery is a form of gambling that involves paying for the chance to win big prizes by matching a series of numbers. It is popular in most states and, according to the Pew Charitable Trusts, accounts for a significant portion of state-sponsored gambling revenues. But, like any other gambling enterprise, it relies on a small group of regular players to drive its profits. In fact, according to an anti-state-sponsored gambling activist, some lotteries rely on the top 10 percent of players to generate 70 to 80 percent of their revenue. This concentration of winnings has made the lottery a major target for critics who seek to limit its existence.
The concept behind a lottery is surprisingly simple. Players pay a modest fee, select a set of numbers or other symbols on a playslip, and hope to match them with the numbers randomly spit out by a machine. The winner gets whatever prize is being offered at the time, usually money or merchandise. The basic model has remained the same for centuries.
Early state lotteries were little more than traditional raffles. The public purchased tickets for a future drawing, and prizes ranged from livestock and farmland to a single unit of a subsidized housing complex or kindergarten placement. As America developed, it became increasingly reliant on these kinds of lotteries. Many of its first church buildings and the early campuses of Harvard, Yale, and Columbia were built with lottery proceeds. The popularity of state lotteries also coincided with the emergence of the nation’s modern financial system. Bankers viewed lotteries as an easy source of tax-free revenue and a way to avoid raising taxes on the general public.
But despite this early success, the state-sponsored lottery has faced persistent problems. The key problem, writes Cohen, is that it stokes the human impulse to covet wealth. It dangles the promise of instant riches at a time when inequality has widened and job security is declining. It undermines the old American dream that hard work and education would ensure a better life than one’s parents had.
The solution has been to introduce new games to increase sales and maintain revenues. In the 1970s, Massachusetts introduced scratch-off tickets; New Hampshire and Vermont banded together to create the first multistate lottery in 1982; and Maine and New Hampshire launched the “quick pick” numbers option. State lawmakers have found that they can tinker with the game to win and retain the approval of voters without risking any of their own budgets. Lottery supporters point out that the proceeds are earmarked for a specific public good, such as education. But studies suggest that the public’s support for the lottery is largely independent of a state’s actual fiscal health.