The lottery is a game where people pay a small sum of money for the chance to win a much larger sum of money. The odds of winning are slim, but millions of people play each week, contributing billions to state coffers in the process. This wildly popular pastime has produced all sorts of controversy, with critics charging that the lottery promotes bad habits, such as gambling addiction, and exacerbates existing social problems, such as poverty and mental illness.
Cohen explores the evolution of lotteries, which have come to dominate the modern world. His sweeping narrative begins in the nineteen-sixties, when America’s fascination with unimaginable wealth and its dream of hitting a multimillion-dollar jackpot coincided with a crisis in state funding. As the population swelled and inflation rose, it became increasingly difficult for many states to balance their budget without raising taxes or cutting services—options that were deeply unpopular with voters.
To address the problem, state governments began to establish lotteries. In 1964, New Hampshire introduced the first state-run lottery of the modern era, and within a few years, 13 other states followed suit. State-run lotteries grew into an industry that spawned new games, including keno and video poker, as well as intense advertising. The revenue they generated made them the dominant source of tax-exempt public funding in the United States.
The popularity of lotteries has been shaped by specific political and economic circumstances, as well as by specific social norms. Lotteries have proven especially popular when state government revenues are low or stagnant, allowing politicians to promote them as a painless way to raise money. They have also proved popular when state governments are pursuing policies that citizens perceive as beneficial, such as education. Lotteries have not been particularly popular in times of prosperity, however, as they can be seen as a form of government-sponsored gambling and thus detract from the perception that states are providing a sound financial foundation.
Among the most popular arguments in favor of lotteries is that they are a good source of “painless” revenue—players voluntarily spend their money for the chance to contribute to a particular public cause. This view of the lottery has been reinforced by the fact that, in most cases, winners are not required to pay federal income taxes on their prizes (though they must often pay state taxes). The profits from lotteries also benefit convenience store owners (who typically run the games); lottery suppliers (whose heavy contributions to state political campaigns are reported); teachers (in states where the proceeds are earmarked for education); and state legislators (who quickly become accustomed to the extra revenue).
Despite these advantages, the popularity of the lottery is not without some downsides. For example, the odds of winning a jackpot are minuscule, and most lottery players end up losing far more than they win. In addition, lottery proceeds are often used to fund illegal activities such as drug trafficking and prostitution. Nevertheless, Americans spend $80 billion on the games each year, and Cohen argues that the benefits of the lottery outweigh the risks.