The Benefits of Playing the Lottery

The lottery offers a chance to fantasize about winning a fortune at the cost of a few bucks. But for many people — especially those with limited incomes — playing the lotto can become a serious budget drain. In the United States, state governments operate the lotteries; they have the sole legal right to do so and they are not allowed to compete with commercial lotteries. As of August 2004, forty states and the District of Columbia have lotteries.

The history of lotteries dates back centuries, and it was a popular form of gambling in Europe by the sixteenth century. In 1612 King James I of England created a lottery to raise money for the Jamestown settlement in Virginia. Lotteries became widespread in the seventeenth and eighteenth centuries, and were used by private groups as a way to raise funds for towns, wars, colleges, and public-works projects.

Generally, a ticket costs one dollar, and the player chooses a small set of numbers from a larger set of possibilities, and then is given a chance to win a prize based on the number of tickets sold. In the past, the chances of winning the top prize were often quite high. Then, in the mid-1990s several states began to lower the odds of winning by offering smaller prizes. Today, some state lotteries have jackpots that are as low as $1 million.

Most of the state lotteries’ profits go toward prize payments and administrative costs, but a significant share goes to specific state-designated projects. In fiscal 2006, for example, New York allocated about $30 billion to education. Other states allocate a portion of their profits to other programs, such as transportation, health, and social welfare.

While it is true that the majority of lottery players are white, participation rates among other groups — particularly those from lower socioeconomic statuses — are much higher. In South Carolina, for example, about a third of all lottery players are “frequent players,” and in general, these people are more likely to be young, male, high-school educated, and from working-class families.

The popularity of the lottery has increased dramatically since the 1950s, when it first became widely available in the Northeast and Midwest. At that time, there was a sense of desperate need by states for revenue to pay for needed services and the belief that lotteries were a good way to raise it without increasing taxes. Moreover, these states had large Catholic populations that were generally more tolerant of gambling activities. Over the years, lottery sales have spread to all fifty states and the District of Columbia. By contrast, in the early 1990s, only six states (Colorado, Florida, Idaho, Indiana, and Kansas) had lotteries. The others waited until later to introduce them, hoping that their neighbors would follow suit. This strategy paid off, and by the end of the decade all fifty states had lotteries. By the late 2000s, lotteries had even spread to Puerto Rico.